It is common practice for small, mid-sized, and large organisations to purchase goods, materials, and services from vendors through e-procurement systems. The advantages of using e-procurement systems are increased transparency, efficiency, and transparent oversight of processes.
For instance, quotes submitted by vendors on e-procurement portals are visible to every concerned member of the buying organisation. Such transparency eliminates any chance that dishonest vendors on paying kickbacks to an organisation’s employees are awarded lucrative contracts. The ultimate beneficiaries of such clarity are organisations, vendors, and society.
In addition to transparency in awarding contracts, e-procurement portals simplify procurement processes, lower costs, and eliminate waste. The newest e-procurement systems also have in-built AI systems to assist buyers and vendors.
Most industries use e-procurement to buy from vendors. A few reasons such industries e-procurement portals should be integrated with banking systems are mentioned below.
Integration with Banking Systems Improves E-procurement Systems
In the past soliciting and fulfilling, tenders proved cumbersome for businesses and vendors because it entailed considerable leg work. These problems have decreased since e-procurement was introduced. Companies that integrate their e-procurement systems with banking systems discover that their business volumes grow.
Because of such integration, companies can invite Earnest Money Deposits (EMDs) from vendors seamlessly using online channels like NEFT and internet banking. Once a bid has been finalised, EMDs are automatically refunded to vendors whose quotations were rejected.
Hence, a business, by integrating its e-procurement portal with a banking system, saves considerable time and effort.
A company’s existing e-procurement system benefits from being combined with a banking system because once integrated; it can facilitate financial transactions. Once integrated with the banking system, a business’s e-procurement system becomes more powerful and useful. What otherwise required multiple visits to banks and business premises happens in minutes via online channels.
Quick Receipt of Payments
Businesses that integrate their e-procurement systems with new-age banking systems enjoy numerous advantages. A company that has an e-procurement system connected to a banking system can receive payments quickly.
Such businesses can receive and make all payments online via e-procurement portals. Online payments and receipts save time and grant managers and owners fuller oversight of their business. Such control leads to better decision making.
Additionally, e-procurement portals generate financial data that can be used to make informed decisions. For instance, data helps businesses forecast revenues and costs more accurately. The in-built AI in e-procurement portals provides insights that optimise processes.
An e-procurement system benefits vendors by saving them time and effort. Vendors can quickly receive payments through their customers’ e-procurement system.
Banks also benefit from using e-procurement portals. Reasons e-procurement is beneficial to banks are as follow.
A Go-To-Market-Strategy for New Age Banks
Fin-tech companies are increasingly incorporating e-procurement portals. Doing so serves as a go-to-market-strategy to partner with PSUs and private enterprises. A fin-tech company can offer to integrate its banking system with the systems of enterprises to enable e-tendering. Fintech companies with such systems advertise them to solicit business.
Full Transparency
Every bank in India is a massive and vital entity. In a single year, each procures items worth crores or more. Banks cannot manage the complexity of procurement without an e-procurement system. As every bank works with multiple vendors, it needs a single platform where every bid can be submitted. E-procurement portals are such platforms. Once requests are presented on an online portal, they can quickly be considered, accepted, or rejected.
From start to finish, the entire procurement process is transparent. There is no scope for graft because all stakeholders have full visibility of bids. Only vendors submitting proposals considered to be in the best interest of the bank are awarded contracts.
AI is Makes E-procurement Invaluable
When AI is embedded in e-procurement portals, managing relationships with vendors becomes much easier. Every bank has hundreds of empanelled vendors and usually tries to maintain a good relationship with each.
AI helps in the maintenance of such relations. Its robust sentiment analysis helps banks partner with reliable vendors while alerting them when there is cause for alarm. AI is sophisticated enough to understand which vendors are likely to renege on their deliverables and which are expected to prove trustworthy.
In addition to its powerful sentiment analysis capabilities, AI also helps vendors serve banks better. For instance, a purveyor of IT equipment who wants to sell to a bank can be assisted by AI. The vendor can input the name of a type of product it carries, and the AI will show whether the bank needs the same or other closely related products.
Without AI, a vendor would have difficulty understanding the needs of banks; thanks to AIs ability to recommend products, vendors have an easier time serving them.
E-procurement is undoubtedly a necessity for businesses, banks, and new-age banks for the reasons mentioned. Besides, e-procurement leads to the streamlining of processes and adds structure to ad hoc processes.
