What Is Procurement Management?

What Is Procurement Management?

What Is Procurement Management?

 

If you’ve asked yourself, “what is procurement management?” the simple answer is that it is a strategic way to manage and optimize the way your organization spends money, typically with the end result of creating a product. Image of a blue question mark for an article about procurement management.

 

The entire process involves acquiring goods and services from vendors and suppliers that follow a budget outlined at the outset. Of course, the whole process is a bit more complicated than this, but that is a simple answer. Read on for a more in-depth explanation.

What Is Procurement Management? How to Make it Simpler

 

Before the age of the Internet or competent computer software that could streamline the process, the entire process of procurement management was all done on paper, in person, and with filing cabinets. Everything from the sourcing to the reconciliation was done in an “analog” format. Then spreadsheets came along, which was the beginning of procurement software

 

However, learning Microsoft Excel or other spreadsheet programs could prove very tough and frustrating for some with many people creating their own systems and formulas. 

 

Again, many preferred to handle procurement management on paper and in person or in their favorite procurement software, Excel. Cloud procurement software and other types of eSourcing and eProcurement systems are much simpler to use and are much more intuitive for the end-user who’s trying to take on a new learning task. 

 

If you’re getting into the field and are asking, “What is procurement management?”, it is much different than it was even 10 years ago, with the advent of intuitive eSoucing software tools available to help streamline the process.

 

What Is Procurement Management: The Steps

 

There are certain steps you should consider as part of your contract management process

 

Are you able to meet these steps with the current methods you’re using in a timely manner?

 

  • Specification. What items do you need from your suppliers? Divide what you need to spend on goods and services.
  • Selection. Decide on a vendor that can produce the items you need, based on the parameters and criteria you’ve set forth. 
  • Contracting. This is the most challenging part, where you must use methods for managing procurement risks and ensure the contract language is fair for both parties as well as protects your organization. 
  • Control. Arrange meetings with vendors, set dates, and finalize contracts. Ensure expectations are met. 
  • Measurement. After planning for procurement management, the next process involves assessing the effectiveness of how the suppliers performed, as well as how well your team performed in their execution.

 

What Is Procurement Management: Software Tools

 

If you’re asking, “What is procurement management?” and still are a little lost when you move through a process from start to finish, make sure that the tools you’re using are working for you and your suppliers—not against you. 

 

Not all procurement management or eSourcing software is the same, and there’s not a one-size-fits-all approach for every company. There are truly some parts of procurement management that should be digital. Some companies still find that negotiations are better face to face because perhaps they have an excellent negotiator on their team.

 

Maybe that’s one aspect of procurement management you don’t want to digitize—but there are other aspects you absolutely should. These include areas such as purchase requisitions, purchase orders, sourcing, contracting, invoice approvals, vendor management, and contract approvals. 

 

One convenient way that eSourcing and procurement management tools work is that you can replicate or copy/paste similar information or projects and just change it slightly (e.g., use the same template for a similar category, or if you’re adding a new similar vendor), without starting from scratch every time. 

 

This is only one example of how the right software can help make your whole process more efficient. Some eSourcing software users save 30% of their time using a digital process versus a manual one.

If you have more questions beyond “What is procurement management?,” and would like to learn more about eSourcing software, click to schedule a demo or contact us today at EC Sourcing Group by calling 1-888-353-9737, option 1.