With the bleak economic downturn affecting sectors of every markets all over the world, business’s are looking to reduce their purchasing / procurement costs ” They are turning to electronic purchasing systems and specialized eProcurement Software.

eProcurement systems organize your employees into authorized groups who are allowed to go out and purchase goods and services on behalf of their business. The issue here is that not much analysis has been done on sorting out the good systems from the poor systems.

So what does one check for ? Well in this brief article I go into some of the key factors that you should consider ” I know this because I undertook the same exercise for my own organization.

Without getting too functionally specific, firstly look for a software company that has been in business for a number of years and has good technical support based in the country in which you are operating.

Look for low operational and training costs and also ask what are the fees to modify the software to your own specifications.

Find out how the software suppliers approach the required tasks ” for example if any custom designed software is required, do they send an analyst/programmer to sit with you or do they sub-contract to a firm in India that you have to relay your design ideas to ?

Functionally speaking, purchasing software can contain quite a focused set of tools, the specific factors you should be looking for are on-line multi-approvals, remote requisitioning, obviously electronic creation and dispatch of a purchase order, invoice matching, goods receiving and interfacing with your accounts system ” these are all the obvious areas.

Purchasing systems also contain some non-obvious tools ” what about facilities for say a supplier portal ? This is a much better approach than a ‘punch-out’ application which is supplier specific, or providing an asset register so that your capital goods do not have to be manually entered into your accounts for depreciation calculations at the year end.

You also need to work out what metrics are available for you to measure the success and performance of your new purchasing system !

When our company went through the exercise of selecting a new eProcurement system we zeroed in on a select few and finally wound up by choosing a system from Mikrofax eProcurement Solutions ” they met our overall criteria and seemed to have a detailed idea of what we were seeking. We also thought about systems from Sap, IBM and Oracle, all who had a deep understanding of the procurement system cycle but nevertheless rather missed the point from the small business perspective.

This article is not intended to be a shopping list of issues but rather a pointer to get you thinking along out-of-the box lines and help your business weather the current financial climate.