The Peril Of Not Using Software For Cloud Based Procurement
CLOUD BASED PROCUREMENT SOFTWARE
For the C-suite executive interested in improving financial operations and procurement processes, the obvious choice is to employ software for cloud based procurement. Without this pivotal piece of software at their disposal, businesses may find themselves exposed to range of costs, risks, and inefficiencies.
One significant issue that may arise without an automated system in place is lack of visibility. It becomes increasingly difficult to track actual spend against the budget when there is no single source file throughout the entire supply chain. If there are manual processes in place to purchase spend, then valuable data may be both incomplete and disorganized. Additionally, the accuracy of reports and audit trails will plummet, making it difficult to identify any discrepancies or anomalies that may occur.
When cloud based procurement software is not implemented, decision making processes are highly likely to be negatively impacted. businesses are then potentially unable to identify the true value of their suppliers and may not have the ability to quickly compare different sources to gain the best possible value. This can lead to increased costs from subpar suppliers and higher purchase prices overall.
Also, businesses may find their process actually much slower than when employing software for the same purpose, as manual activities require far more time for completion. This lack of efficiency may create additional costs and affect customer service levels and the businesses overall competitiveness.
From risk management perspective, not utilizing software for cloud based procurement entails wide range of issues. Compliant, electronic purchase transactions are not possible and thus leave companies vulnerable to noncompliance with government regulations, not to mention increased audit risks. Furthermore, any manual processes used in procurement may be subject to fraud or other illegal practices.
All in all, it is clear that the decision to not employ software for procurement comes with multitude of risks. Companies may face greater costs, lower efficiency, and inadequate control without the use of the proper tools. Ultimately, the decision-makers should weigh these risks against the potential benefits of cloud based procurement engagement and make their decision accordingly.
