EProcurement Software: A Complete Overview, Benefits, and Challenges

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eprocurement software


IBM first used eprocurement software in 2000, launched as a replenishment management system and method. More than a decade later, it is still growing in popularity. An e-procurement software refers to an enterprise software system often used to automate and integrate the entire procurement cycle and its process for any organization.

Many businesses that often deal with procurement and sourcing are searching for a reliable Software Development Company to help them digitize their procurement processes. This is resulting in a continued increase in demand for the same. One could blame that on the many benefits automation of procurement processes brings to the table, but more about that later. First, let’s understand what e-procurement software entails.

What is an eProcurement Software?

As the name suggests, an e-procurement software system is a software solution designed to manage and automate various procurement processes involved in sourcing resources. There are seven or more different processes involved in it. These are


The earliest phase of the procurement process is e-informing. In this phase, buying information is researched and transferred within different departments of the organizations via online channels.


E-sourcing involves using online tools and technologies to research best-suited vendors based on the organization’s requirements. This phase also collects information about potential vendors based on their history and decisions.


Cloud-based tendering is the next step of the procurement process for organizations. While electronically sourcing provides all vendor information, e-tendering options allow organizations to request and accept quotations/tenders from them electronically.


The next phase of the procurement process is dynamic negotiation and auctioning between the company and the vendor. At this stage, prices and contracts are negotiated online in a time auction, which is conducted through a web portal that allows buyers and vendors to bid online


After pricing and contract terms, the procurement process for any organization also includes purchasing. E-ordering part of the process automates this purchasing process and uses an electronic ordering system to receive and deliver products or services.


The last phase of the procurement process is presenting the bill electronically to the procuring organization. The company can quickly receive, process, and pay invoices using web tools. It sets a benchmark for the entire organization when it comes to invoicing while providing strict guidelines to all stakeholders to adhere to.

Why shift to eprocurement software systems?

Increased efficiency, less human error, better spending control, and greater insight into procurement processes are benefits of automated e-procurement systems. These solutions have significantly streamlined the procurement process, making it easier to manage and more effective for companies of all sizes. Here is a list of reasons that makes electronic procurement software the better choice over manual procurement.

Reasons to switch from manual procurement to eProcurement

Effective Data Management

Electronic/ digital procurement has one significant benefit- practical data management. It is proven to be instrumental in improving operational workflow efficiencies by adopting various technological techniques. When the data is stored on a cloud, everyone can access it with proper credentials at any time. This further helps reduce the costs and time taken to manage that data.

Procurement Automation

Procurement automation includes automating routine tasks that are involved in the procurement process. This increases the efficiency of all functions and decreases the need to employ more manpower. Procurement automation automates processing purchase orders, validating material receipts, managing payments and invoices, etc.

Streamlined Supplier Management

Supply management often involves repetitive tasks, including vendor approvals and communications. Digital methods can automate these processes with much more efficiency and effectiveness. This also facilitates communication between vendors, suppliers, and customers, helping keep track of products to the most minor details.

Transparent communication

Quite a few stakeholders are involved in the supply chain and procurement processes. This increases the requirement for transparency, and procurement software ensures just that. In the procurement process, there are multiple communication channels between procurement teams, finance teams, suppliers, vendors, approving authorities, and more.

These channels must be transparent for a better flow of information and operations, and procurement platforms guarantee this transparency. It encourages collaborative efforts between stakeholders by promptly unveiling discrepancies and potential risks.

Minimizing Legal Risks

Conventional tracking and processing methods for procurement processes are paper, thus leaving a long trail of physical data and records. Paper records make auditing even more complex and susceptible to data damage and loss, increasing legal risks for any organization. On the contrary, digital record keeping provides a secure and robust solution to these risks and ensures that authorized personnel get to access the data.

Supplier Risk Management (SRM)

Digital or eprocurement facilitates better communication and collaboration with the supplier and real-time risk monitoring. AR/VR technologies and virtual supplier audits are great tools to mitigate the risk involved in digitally transforming the supply chains.

Apart from these reasons to switch to digital procurement systems, one must also know the benefits digital or eprocurement solutions offer. Below are a few of them.

Benefits of eProcurement software

  • Efficiency is a given with eprocurement solutions as the entire sourcing and purchase process becomes a lot faster and simplified compared to traditional pen and paper methods.
  • The lesser need for skilled labor and manpower and reduced workflows and supply chain time ensure considerable cost savings for any organization. Furthermore, negotiating lower prices with suppliers and recognizing opportunities for bulk purchases saved money in the long run.
  • Digital systems are more adept at enforcing procurement regulations and ensuring policies are adhered to at every step. It reduces threats to the security of procurement processes and can protect organizations from future lawsuits.
  • As mentioned above, better communication between the stakeholders is an added advantage of going online with procurement systems. It fosters stronger business relationships and collaborations.
  • Data collected by e-procurement systems is crucial and can be analyzed to deliver even better results in the procurement and sourcing industries. The data helps gain vital insights into various trends, patterns, and potential areas of improvement.
  • Automating workflows speeds up purchasing cycles, providing quicker order processing and delivery, thus adding speed to its advantages.
  • Organizations that leverage data insights and reports of procurement software have observed increased revenue and pricing benefits. These insights have proven to be an asset, especially in negotiations.

E-procurement provides an innovative and efficient method for obtaining products while allowing businesses to enhance their purchasing procedures, increase cost-effectiveness, and get a competitive edge in the market.

Examples of eProcurement functions

Here are a few functions that electronic procurement software digitizes:

  • Finding suppliers: eprocurement software solutions
  • Purchase requisition
  • Vendor assessment and selection
  • Selection of the goods and services required
  • Vendor onboarding
  • Identity verification
  • Negotiate price and terms
  • Spending analytics
  • Procurement planning
  • Quotation and information request

Challenges in eProcurement solutions

While eprocurement software solutions are witnessing a rapid rise in adoption, specific challenges hinder the same. One can quickly digitize the procurement process if one can defeat these challenges.

Lack of Knowledge

Lack of knowledge of the eprocurement software and its technicalities is the biggest challenge for businesses with traditional procurement systems. There needs to be more knowledge and awareness of the digitizing procurement systems and their benefits.

Reluctance from stakeholders

All stakeholders involved in the procurement practice, vendors, suppliers, customers, buyers, etc., are reluctant to switch from conventional procurement methods. Every stakeholder needs to be on the same page for implementing a procurement system and have the required skill set. If not, it can seriously disrupt data flow and supply chains.

Customization and Flexibility

E-procurement solutions lack flexibility and may be inadequate in accommodating different organizations’ unique needs and workflows. However, this drawback can be dealt with with customizable e-procurement solutions—e-procure (Case study). E-procure is one such customized cloud-based procurement software solution developed by OpenXcell.

The entire development phase of eprocurement software takes workforce and expertise.
Many firms make mistakes that cause delays, frustration, and sometimes even complete failure. Therefore, it is essential to do a thorough evaluation of the entire procurement process before a business decides to invest in it. Only then can an organization fully benefit from this digital transformation.

Cost and time taken in developing an eprocurement software

Below is the costing and required tech stack involved in a basic electronic procurement software system with a vendor portal functionality and various communication tools.

Required integrations

  • ERP
  • CRM
  • Inventory Management System,
  • Warehouse management system,
  • an accounts payable (A/P) management system, amongst others

Implementation and development time

It takes around ten months to develop a custom procurement software with basic functionalities.

Development costs

The cost of developing a custom, cloud-based procurement solution ranges from around $100,000–$500,000, depending on the complexity of the solution designed. The return on investment for such a solution can go up to 315%.

Best practices of electronic procurement software

  • Clearly defined objectives are a must for any eProcurement process
  • Standardized processes across the organization ensure consistency and efficiency in most procurement activities
  • Maintaining a transparent procurement process provides visibility to the entire procurement lifecycle. It is good practice to communicate all requirements, criteria, and decision-making processes to stakeholders on time.
  • Leveraging data analytics to make better inventory decisions can also be fruitful for any organization.
  • Training the procurement staff to evolve with the times and be comfortable with the switch is essential.


It’s safe to say that most procurement systems worldwide are digitally transforming themselves or will do so in the next decade. Sooner or later, enterprises will have to realize the various benefits of digitizing the procurement industry. Cloud-based procurement software and automated procurement systems are the future, and enterprises should invest in them.

For enterprises looking for reliable software product development services, OpenXcell is an excellent choice. The company has many successful custom software development solutions and a rich roster of happy clients to vouch for its quality. Its procurement solution – E-procure, is an excellent example of a versatile and robust digital solution for cloud-based procurement and procurement services.

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Samragyi Chamoli

Zealous, enthusiastic, and consistent, Samragyi is an ardent reader and an experienced writer. She loves animals and adventure.


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