Procurement software: How to choose the right solution

Procurement software is becoming increasingly essential for modern businesses looking to improve their operational efficiency. With features like spend visibility, unique approval workflows, and automation, the right software can help reduce manual processes and eliminate unnecessary expenses, leading to significant cost savings and better spend management.

However, with a growing number of procurement solutions on the market, each touting different features, choosing the best procurement software for your business can be difficult. Before investing in a solution, it's wise to consider key features and the common challenges they address to find the most valuable option for your organization.

What is procurement software?

Procurement software refers to any digital tool that helps streamline the procurement process, especially by automating routine and time-consuming tasks. These tools might help with:

• The procure-to-pay process 

• Spend analytics

• Supplier management

• Creating requests for quotes (RFQs)

• Strategic sourcing

• Invoice processing

• Inventory management

• Managing the entire procurement lifecycle

Procurement software, also called e-procurement software or electronic procurement, is a specific subset of the broader procurement management software category. While procurement management software covers the entire procurement process, more specialized tools—like contract management software, which focuses solely on contract creation, storage, and management—fall under the procurement software umbrella.

Standalone procurement software vs. integrated procurement tools

Procurement software solutions that oversee a specific part of the procurement process are called standalone procurement tools. They provide in-depth capabilities for certain steps, such as invoicing or purchase order management, and communicate with other software to meet business needs. 

For example, a standalone solution might integrate with your customer relationship management (CRM) or enterprise resource planning (ERP) system. This type of solution is usually more cost-effective if you don’t need a comprehensive procurement solution.

Integrated procurement tools, on the other hand, are designed to centralize all the tools you need within one system, thus making your procurement workflows more efficient. An integrated system might let you do all of the following:

• Create purchase requisitions

• Set up approval processes

• Compare supplier pricing

• Manage supplier relationships

• Use real-time visibility tools to support informed decision-making

• Predict potential supply chain disruptions

• Identify saving opportunities

An integrated tool can improve visibility, maintain compliance, increase efficiency, and strengthen supplier relationships.

5 key features to look for in procurement software

While the features that will be most helpful for your business depend on your workflows and existing tech stack, a few key elements will benefit just about any organization. Here are a few features that deserve attention.

1. Spend analytics and reporting

Insights into your organization’s budgets and spending can help make your procurement process more strategic and efficient, leading to significant cost savings. Procurement software with spend analysis features can help you assess:

• What you’re spending money on

• Where your money is being spent

• Who your money is being spent with

• How much you’re spending

With this data, you can identify cost-saving opportunities, pinpoint bottlenecks in current procurement processes, and eliminate unauthorized or noncompliant spending. You can also use supplier performance information to improve vendor selection and generate more accurate forecasts for better decision-making.

2. Systems integration and compatibility

Successful digital transformation requires stakeholder buy-in, which is why it’s critical to consider the change management process when shopping for a new system. 

Research how each procurement software option would integrate with your existing workflows, technology, and personnel. Consider whether it aligns with your organization’s ability to adopt new processes and how much disruption the implementation phase might cause.

To help minimize impact, pick a solution with a user-friendly interface so there’s less of a learning curve for staff who need to adopt it for their daily work. According to a 2023 study published in Computers in Human Behavior Reports, employees who think new digital tools are easy to use are more likely to perceive them as helpful, which increases their willingness to engage with the new technology. 

Put simply, the easier the system is to use, the easier it will be to secure buy-in.

3. Approval workflows and compliance controls

Procurement software can modernize the review and approval of purchase requests to reduce manual work and prevent delays. This streamlines purchasing, improves purchasing compliance, and reduces the risk of human error.

Beyond efficiency, automated workflows also give you more control over the entire purchasing process. Many procurement software solutions allow you to set custom guardrails that ensure all purchases comply with internal policies, budgets, and regulatory requirements. Clearly defined roles, responsibilities, and guidelines can also help prevent unauthorized purchases and maintain a more accurate audit trail of all requests and approvals.

4. Supplier management and bulk purchasing

Maintaining strong supplier relationships can help your organization maximize cost savings through better negotiation terms, bulk purchasing discounts, and increased quality assurance. Procurement software supports these relationships by enabling ongoing performance monitoring, allowing you to identify the most reliable suppliers and those offering the best deals.

5. Automation and efficiency

Efficiency is a goal every procurement team shares, and that’s precisely what automation delivers. By handling routine tasks like generating purchase orders, processing payments, sending notifications, and creating reports, automation reduces unnecessary labor costs and minimizes opportunities for human error.

Benefits of using procurement software for your organization

Centralized procurement software brings loads of benefits to organizations of all sizes and industries. Some of the most notable benefits include:

• Faster cycle times: A streamlined procurement process leads to quicker processing of purchase orders, approvals, and invoices, which helps speed the entire procurement lifecycle.

• Cost savings: Real-time data analytics help companies save money by identifying cost-saving opportunities, enabling better contract terms through improved supplier management, and controlling tail spend by enforcing company policies.

• Reduced manual labor: Automating tasks frees up employees' time, allowing them to focus on more strategic activities.

• Better purchasing compliance: Tailored permissions, controlled purchase options, and more consistent documentation of each purchasing step help organizations maintain enhanced compliance.

• Improved forecasting: The predictive analytics capabilities offered by some procurement software solutions enable more accurate forecasting of future needs and costs.

   

How Amazon Business simplifies procurement

Amazon Business is an integrated procurement tool that allows businesses to purchase goods and services through a streamlined experience similar to the consumer-facing Amazon site. This procurement solution offers several features that can help improve your business operations.

Integration with existing procurement software

Amazon Business bridges the gap between modern and legacy procurement through integration functionality. You can use it as a standalone solution or integrate it with your existing procurement software through features like:

• Punchout: Access the selection and convenience of Amazon Business while maintaining the compliance and control of your current systems.

• Punch-in: Start the purchasing process on Amazon Business, then check out using your organization’s e-procurement system. 

• Integrated Search: Integrate Amazon Business’s search functionality within any e-procurement system.

• Hosted Catalog: Provide easy access to products within spend policies by saving preferred items in a static file in your e-procurement software.

• Single Sign-On: Simplify onboarding by letting buyers access your business account with their existing corporate credentials.

   

Bulk purchasing and business-only pricing

Amazon Business offers business-only pricing, including wholesale prices and quantity discounts on bulk purchases. You can also save up to 15 percent on purchases through the Subscribe & Save feature, which enables automatic deliveries for eligible items.

For further savings, Amazon Business offers AI-powered product recommendations to help you find comparable items at lower prices or with available discounts.

Procurement analytics and reporting tools

Amazon Business Analytics is a feature available with your Amazon Business account that can help you optimize your business spend with visibility into your purchase history. These insight dashboards help you:

• Identify purchasing trends by groups and individuals

• Determine strategies to optimize spend, such as supplier consolidation or bulk purchasing

• Reconcile invoices and payments easily

• Access multiple types of reports to compile the information you need

   

Business Prime benefits

Business Prime, which is a separate, paid membership account for Amazon Business members, offers even more benefits, including:

• Fast, free delivery on eligible orders

• Free pallet delivery for large purchases on select items

• Consolidated shipping to reduce deliveries

• Spend Visibility to help inform budget decisions

• Guided Buying to help employees select approved products

• Member-only offers for Business Prime members

To create a Business Prime account, you first need to create a free Amazon Business account.

Start saving with procurement software 

Procurement software like Amazon Business can significantly improve your profit margins through cost savings, reduced spending, and decreased labor needs. Amazon Business takes these savings even further with business-only pricing, discounts, and Business Prime benefits, like free shipping on eligible items.

Start putting money back in your pocket. Talk to sales about how Amazon Business can improve both procurement efficiency and your bottom line.