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What you should demand from your digital procurement system

If your business is to get the most out of a digital procurement system, that system should do the following: improve control, streamline processes and increase profitability.

By: Morten Sandvold Schee 03.12.2018 09:16

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- The future is digital. Introducing a digital procurement system is a sound, profitable investment. It will give you greater control and predictability over costs and time spent by employees, says Magnus Andersson. He is the CEO of Icio AB, Millum’s Swedish sales agent.

For more than 15 years, Millum has been working with its customers to simplify trading between purchasers and suppliers in the food service industry. Today, Millum’s systems are in operation with more than 10,000 users at a raft of large, structured hotel and restaurant chains such as Nordic Choice Hotels, Nores and Compass Group.

- We have extensive experience of the food service industry, and in-depth knowledge of purchasers’ and suppliers’ needs. Our solutions are technically strong and of high quality, providing great flexibility for a procurement organisation. We also know how important it is to make life as simple as possible for our users, says Andersson.

So exactly what demands should you place on a new digital procurement system? We asked Magnus to outline the three most important points.

Control over all trading

With a digital procurement system, a company has better control and overview of what is purchased, which agreements should be applied and where the expenses are. A digital system reduces costs thanks to greater transparency and better cost control.

- For a purchaser, it’s about reducing purchases outside of existing agreements, and strengthening relations with suppliers in order to secure the best price. With a good digital procurement system, you can remedy any deviations from contract and achieve better control, without wasting time finding and reading reports, Andersson explains.

Simplified processes

The future for procurement lies in P2P, or purchase-to-pay. All purchases in one place, in one service. As a purchaser, you should be able to deal with everything from ordering to payment without unnecessary tangents. Simple and flexible. Nor should you have to spend time investigating which of your suppliers offers the various products you’re looking for. All your agreements should be a part of your purchasing solution.

- This is also very good for the suppliers. In our portal, we visualise the supplier’s products, thus increasing loyalty and reducing the risk of trading outside of agreements, says Andersson.

Higher profitability

With greater control and simpler processes, both management and employees can make better decisions, which will increase profitability on both the bottom and top line. The right procurement system enables you to better manage and reduce administration costs thanks to process automation and optimisation, the result being that the whole work force can help to save the company money.

- This may all sound obvious, but it does require solid preparation. When the whole company is ready to make the right decisions, you will notice savings on the bottom line very quickly, Magnus Andersson concludes.