Life has become much easier with online purchasing, there is no doubt about it. Having groceries appear on your doorstep within hours of purchasing, ordering rides via your phone, and delivering gift cards to emails in seconds has made us all more efficient.
Online ordering has even more benefits for healthcare organizations that are providing care to patients. Being able to order med-surg supplies, linens, janitorial and dietary services among other essentials online has made it faster and easier for facilities to be properly prepared for patients. But the time it takes to go from vendor site to vendor site, purchasing items, tracking the orders (if possible), receiving and processing invoices manually means time away from patient care. Automating that process with e-procurement puts the patients back at the center of the process.
What can e-procurement do for your healthcare organization?
1. Faster transactions
Orders placed with various vendors on one platform are sent to those individual vendors immediately with one click. No need to separate out orders or – even worse! – fax or email orders to reps. With item masters already set up in the platform, you don’t have to search through thousands of items to find what they need. E-procurement systems allow you to set up formularies, par levels and comparison shop. Enter in quantities, click order and you are done!
2. Accurate Budgeting
E-procurement systems contain all contracted pricing from vendors and GPOs in the platform, making sure orders stay on budget. If the price of an item has changed, the system will flag it to alert you. Additionally, the system collects data on your spend by location, item and even physician to help you better manage your budget. This helps healthcare organizations determine where they could be saving on supplies and more precisely predict future spend.
3. Eliminating Rogue Spending
E-procurement systems are set up so your team can only order items in the item master at the contracted pricing. This feature ensures your employees only order approved supplies so your organization benefits from the discounts designated in your contract. This is used in conjunction with #4…
4. Removing Approval Bottlenecks
There are several bottlenecks that crop up in the procurement system as a result of the complexity of the entire process. With manual ordering, tracking on spreadsheets or paper, and getting teams to agree to items and quantities being ordered, sometimes the procurement team may not have the time to comply with all the protocols. E-procurement can prevent this from happening as all the requirements like approvals, accurate requisitioning, and payments are streamlined. Setting up approval processes eliminates things like rogue spending, keeps teams on budget all while allowing organizations to keep accurate records of the entire process.
5. Tracking Supplies
Supplier management is probably one of the more beneficial aspects of using e-procurement. Having tracking numbers on every order in the system means you don’t have to worry if a supplier got your order, and gives you confidence in your ability to run your facility. Also, knowing when supplies are arriving means people won’t over-order or stockpile supplies “just-in-case.” And by tracking this data, you can create a preferred list of trusted vendors, which can lead to discounts or price reductions.
6. Automation = Fewer Manual Errors
Automated e-procurement systems reduce duplicate entries and manual errors. In fact, studies have found an 83% decrease in PO processing time with e-procurement systems. The same study also found that a completely or partially automated procurement system can eradicate human error completely. Once orders are placed, an e-procurement system provides tracking information for items ordered, the ability to e-receive items into inventory, and automated invoicing and 3-way matching. Another bonus? It’s paperless!
7. Visibility
One of the reasons why the procurement process is complicated is because there is only so much that a company can track using legacy systems. However, e-procurement can help to make the process more visible as all information is online, available anytime, anywhere – key in a mobile world. Anyone from purchasing managers to c-level executives can have access to real-time information for better decision making.
8. Easy Audits
Healthcare organizations are often required to know the number of goods and services which were purchased from suppliers during a period. Companies that use legacy systems to carry this out will have to sift through papers and long spreadsheets. Even then, there may be information that is missing. E-procurement completely eliminates the process of analyzing and auditing paper receipts and documents. The software will record any alterations that were made to the original order along the way. Thus, an auditor is capable of determining why and where the alterations were made.
9. Remove Data Silos
The procurement process also includes a range of individuals belonging to different departments. For example, there are vendors, finance departments, requisitioners and inventory managers. Each of these parties have their own databases where information is stored. These databases are usually known as data silos which tend to be more common in legacy systems.
Data silos create potential for miscommunications along the way. However, e-procurement solves this problem by creating a centralized database of all the information required during a procurement cycle. All the individuals or teams involved in the procurement system will be able to access the data recorded during the process.
10. Reporting & Analytics
In addition to the benefits of having your ordering, receiving and invoicing all interconnected on one platform, reporting tools that come with e-procurement systems provide real-time transparency and insight into your business. Dashboards with pre-built or customized reports allow you to drill down to see crucial details. With a clear view of your organization’s spend habits and inventory, you are better able to reduce waste and make smarter purchasing decisions in the future.
Actionable reports give you key business metrics that help you improve your business by optimizing your supply chain process. Having access to real-time reports visible across all facilities and are designed to provide insights that directly impact your bottom line.
What can e-procurement do for you? These systems have made it possible for companies to attain a 40 to 60% increase in productivity due to the automation of several aspects of the process and a 65% drop in operating costs. Therefore, this system makes it possible for companies to not only simplify their procurement but save costs along the way as well.