Everything You Need to Know About Cloud-Based Procurement

Gone are the days of lost invoices and rogue receipts. The emergence of cloud-based procurement software platforms has been a true game-changer in the supply chain management landscape. In fact, according to a recent survey, as much as 67% of enterprises' infrastructure is cloud-based, while 81% of businesses already have a multi-cloud strategy laid out. 

Needless to say, cloud procurement solutions are rapidly gaining momentum, especially in today’s digital age. One of the primary reasons for this huge popularity is the myriad of benefits these solutions bring. From agile and efficient operations to data-driven decision-making, the list is endless. 

In this article, we will delve into the key aspects of cloud procurement solutions, their features, and their advantages.

Definition of Cloud-Based Procurement

Simply put, cloud-based procurement refers to the use of cloud computing technology to manage and streamline the procurement process. It consists of a comprehensive suite of tools based on the cloud that handles the entire procurement lifecycle, starting from sourcing and extending up to payment. Overall, it allows for a centralised and accessible solution for procurement professionals. 

Features of Cloud-Based Procurement

Cloud procurement comprises a wide range of services designed to streamline and optimise the procurement process using cloud computing technology. The three primary categories of cloud procurement are:

• Infrastructure as a Service (IaaS)
• Platform as a Service (PaaS) and 
• Software as a Service (SaaS)

Infrastructure as a Service

Infrastructure as a Service, known as IaaS, is a type of cloud computing that offers virtualised computing infrastructure through the Internet. Instead of buying and handling physical servers and data centres, organisations can use IaaS to access virtual resources and pay for what they use as they go along.

A key benefit of adopting Infrastructure as a Service lies in the optimal flexibility it provides to users when hosting custom applications or standard software.

Platform as a Service

Platform as a Service, or PaaS, is another cloud computing model that provides a platform allowing users to develop, run, and manage applications. Thus, it eliminates the need for creating or managing cloud systems. 

PaaS simplifies application development by extending ready-made development frameworks, tools, and services.

Software as a Service

Software as a Service (SaaS) is a model that provides software applications over the Internet through a subscription-based model. Instead of purchasing and setting up software on your own devices, you can use applications that are stored in the cloud. All you require is a reliable internet connection to access user-friendly solutions.

Advantages of Cloud-Based Procurement

Cloud procurement solutions provide a wide range of benefits, improving the overall efficiency, transparency, and cost-effectiveness of the procurement process. Here are some pivotal benefits:

• Cost-Efficiency

By automating and standardising routine tasks, cloud-based procurement can reduce staff costs by as much as 21%. In addition to this, many procurement software platforms operate on a subscription basis, enabling organisations to pay only for the resources or services they use. This flexibility reduces upfront costs and aligns expenses with actual usage. 

• Scalability and Quick Deployment

Cloud procurement solutions offer scalability to accommodate varying workloads and organisational growth. As procurement needs evolve, organisations can quite easily scale their usage up and down without the need for any significant infrastructure changes. Furthermore, these solutions can also be deployed easily and rapidly in comparison to traditional on-premise systems. 

• Increased Visibility

Procurement software platforms offer enhanced visibility into the cash flow of an organisation, thereby facilitating the finance and purchasing departments to improve processes. With this increased visibility, businesses can very quickly identify any inefficiencies or saving opportunities across all units and take the necessary steps to rectify them. Thus, it results in improved efficiency and productivity across core business processes.

Apart from these, there are quite a few other advantages of cloud-based procurement. Such include seamless integration, ease of use, robust security measures, and compliance management.

Conclusion

Cloud-based procurement is undoubtedly shaping the entire landscape of procurement management, offering organisations cost-effective and scalable solutions. Embracing this digital transformation of procurement processes is not just a trend but a strategic imperative for all enterprises that wish to stay competitive in the modern business landscape. 

If you wish to know more about the same, check out the Advanced Certificate in Supply Chain Management offered by IIT-Roorkee in collaboration with Imarticus Learning. This 6-month procurement management course will help you acquire the skills and knowledge required to excel in the vast field of supply chain. Additionally, this program has several other advantages, including experiential learning, a new-age curriculum, lessons from industry experts, and much more.