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Everything You Need to Know About Cloud Procurement

blog dateJul 25, 2023 | 8 min read | views 419

 Cloud procurement software is a technology solution that enables organizations to streamline and automate their procurement processes. Hosted and accessed through the cloud, this software eliminates the need for on-premises infrastructure and provides users with the flexibility to access it from any location with an internet connection. It offers key features such as purchase requisition management, supplier management, purchase order management,  invoice management,  and integration and collaboration

What Is Cloud Procurement?

Cloud procurement involves utilizing cloud-based technology to streamline and automate the procurement process. It encompasses activities such as sourcing, purchasing, and supplier management, leveraging the scalability, accessibility, and cost-effectiveness of cloud solutions. This approach enhances efficiency, collaboration, and data visibility in procurement operations, leading to improved overall supply chain management.

What are some of the key features of Cloud Procurement? 

1.Purchase Requisition Management: It allows users to create and manage purchase requisitions, enabling employees to request goods or services that need to be procured. It includes features like requisition approval workflows, budget validation, and integration with supplier catalogs.

2.Supplier Management: This feature enables organizations to maintain a centralized database of suppliers, including contact information, contracts, performance ratings, and compliance details. It helps streamline vendor onboarding, track vendor performance, and manage supplier relationships effectively.

3.Purchase Order Management: The software facilitates the creation, approval, and tracking of purchase orders. It allows users to generate purchase orders from approved requisitions, manage order revisions, track order status, and streamline the entire procurement process.

4.Invoice Management: Cloud procurement software streamlines the processing of invoices, enabling users to match invoices with purchase orders and receipts. It automates invoice approval workflows, reduces manual data entry, and improves accuracy in the accounts payable process.

5.Integration and Collaboration: Cloud based procurement software integrates with other enterprise systems like ERP (Enterprise Resource Planning) software, financial systems, and supplier networks. It facilitates collaboration between stakeholders, such as procurement teams, finance departments, and suppliers.

Different Types of Cloud Procurement

There are two main types of cloud procurement - direct and indirect. Let’s see the key differences between direct vs indirect procurement

  • Direct ProcurementThis procurement cloud focuses on acquiring goods and services incorporated directly into a cloud service provider (CSP). The organization engages directly with the CSP and negotiates the terms, pricing, and service level agreements (SLAs) without any intermediaries. Direct procurement grants organizations greater control over the selection of cloud services, allowing them to choose the most suitable CSP. However, the organizations do not have the resources to manage the procurement process
  • Indirect Procurement Indirect Procurement involves organizaitons engaging with third-party intermediaries such as value-added resellers (VARs) or brokers to procure cloud services on their behalf. The intermediaries act as a bridge between the organization and the CSP, assisting with tasks such as vendor selection, contract negotiation, implementation, and ongoing management.

How to Implement Cloud Procurement Strategy?


Implementing Cloud Procurement Strategy

Implementing a procurement cloud strategy involves several key steps to ensure the effective acquisition and management of cloud services. Following are some steps to follow:

1.Define your cloud migration plan

Before implementing a procurement cloud strategy, it's crucial to have a clear plan for migrating your existing systems and applications to the cloud. Assess your current infrastructure, identify dependencies, and create a roadmap for transitioning to the cloud.

2.Choosing the right cloud service

Identify the type of cloud service that aligns with your requirements. Consider integration capabilities, reliability, support options, cost structures, and security and compliance needs. This careful consideration will ensure you select the most suitable cloud service for your organization.

3.Review the responses

Carefully evaluate the responses received from potential cloud service providers. Take into account factors such as cost, performance, security measures, data management policies, and the provider's track record. Request demonstrations or presentations to better understand how their features and services would benefit your company.

4.Contract Negotiation

Initiate contract negotiations with the selected cloud service provider. Clearly outline the terms of your relationship, including important aspects like data ownership, termination clauses, security responsibilities, and service-level agreements. This negotiation phase is crucial to establishing a mutually beneficial partnership.


Prioritize security throughout the procurement process. Evaluate the cloud service provider's security measures, such as data protection practices and industry certifications like ISO and SOC. Ensure their security protocols align with your organization's standards and requirements.


Continuously monitor the performance of the cloud services once they are implemented. Keep a close eye on metrics related to availability, response times, and overall service quality. Promptly address any issues or concerns that arise to ensure the optimal functioning of your cloud services.

Why should businesses adopt Cloud Procurement Software?

Cloud procurement software offers several benefits that can positively impact organizations. Here are some key reasons why businesses should adopt cloud-based procurement:

1.Cost savings

Procurement allows organizations to reduce upfront costs associated with traditional hardware and software purchases. Instead of investing in expensive infrastructure, organizations can adopt a pay-as-you-go model, paying only for the cloud services they use. This cost-effective approach eliminates the need for large capital expenditures and allows for better budget management.

2. Enhanced efficiency and productivity

Cloud services offer improved operational efficiency. Organizations can leverage the cloud's automation capabilities, self-service features, and pre-configured templates to streamline processes and reduce manual tasks. Employees can access cloud services from anywhere with an internet connection, enabling remote work, collaboration, and improved productivity.

3.Access to advanced technologies

Procurement cloud grants organizations access to cutting-edge technologies that may be otherwise cost-prohibitive or time-consuming to implement in-house. Cloud providers often offer a wide range of services, including machine learning, artificial intelligence, big data analytics, Internet of Things (IoT), and serverless computing. Leveraging these technologies can drive innovation, improve decision-making, and enable new business models.

4.Easy Usage

Unlike long-term user training, cloud-based procurement solutions are easy to use. By using cloud procurement solutions, businesses can meet the demands of an evolving market, and also control maverick spending. 


E-Invoicing is a more efficient and secure way to process invoices when compared to traditional invoices. Moreover, the 3-way matching integration allows the accounts payable team to ensure that the invoice is automatically matched to the purchase order.  This process saves time, money and reduces errors. 

6.Seamless Integration

Cloud procurement platforms can typically integrate with a wide range of other applications, such as accounting software, CRM software, and ERP. This integration can help to automate the procurement process and ensure that data is shared between different applications. It can save businesses time and money, and it can also help to improve accuracy.


Cloud procurement software streamlines and automates procurement processes, reducing costs and boosting efficiency. Key features like purchase requisition, supplier, purchase order, and invoice management provide a comprehensive solution. Implementing a procurement strategy involves careful steps like defining migration plans, choosing the right cloud service, and prioritizing security. Benefits include cost savings, advanced technology access, easy usage, e-invoicing, and seamless integration. Embracing cloud procurement transforms processes and drives better outcomes for organizations.



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