Large Firms Want eProcurement, Not ERP, Software

Businesses are keen to adopt the most innovative strategies to manage their cash flow, and the rise of Software-as-a-Service and cloud computing are part of those strategies. But new research is offering insight into exactly what kind of software businesses want, and it turns out enterprise resource planning (ERP) tools are no longer in vogue.

Ivalua published its quarterly “Trending in Procurement” survey this week and found that among large companies, procurement officials prefer eProcurement-specific software, with 60 percent of businesses that use some type of software using a service deployed by an eProcurement module and developed by an eProcurement specialist. Just 20 percent used an ERP system for their eProcurement software.

According to researchers, there are several factors impacting businesses’ preference of eProcurement-specific aids, including a faster return on investment, faster deployment of the tool, stronger expertise of the procurement process, and a greater grasp of the functional requirements of procurement.

The research also revealed that among the large companies surveyed, 90 percent have some kind of procurement-dedicated tool. Companies most often cited the benefit of greater purchasing visibility as the main reason why eProcurement solutions are valuable to their businesses. “This greater visibility into company spend improves the knowledge of company purchases, assists in optimizing the supplier panel, allows the aggregation and sharing or orders, highlights savings and opportunities by spend categories or by supplier and, in the end, helps obtain the best commercial conditions during negotiations with suppliers,” the report found.

Ivalua primarily focused on European and North American large businesses for the survey.

Despite the high adoption rate found in this survey among large businesses of eProcurement technologies, a separate study released last March revealed that while the majority of businesses acknowledge the benefits of these tools, only about half said that enabling procurement technologies are easy to use, and less than half said they are fully functional to the user.