-
10 Must-Have Features to Look for in E-Procurement Software for Hotels
Automating Procurement: Unlocking Efficiency and Cost Savings
In recent years, hoteliers have entered a period of unexpected disruptions. To address these changes, leading chains and independent operators are looking to integrate modern technologies into their operations and guest offerings. According to Deloitte, over half of hoteliers expect automation to improve their bottom lines as well as guest experiences.
That's where e-procurement comes in, acting like a digital superhero to the entire hotel purchasing and payment process. In fact:
- E-procurement can help hotels reduce maverick spending by up to 30%. (Source: IBM)
- Over 80% of hotels that implemented e-procurement reported improved efficiency. (Source: Journal of Hotel & Business Management)
- Companies that implement e-procurement systems can achieve cost savings of up to 40% on goods and services. (Source: Aberdeen Group)
As a hotelier always on the lookout for smart ways to boost profits, you’ve likely encountered several different e-procurement options geared towards hospitality. If you’re unsure how to find a best-fit solution, here are ten features to prioritise. But first, what are the benefits of e-procurement for hotels?
E-procurement software addresses resource constraints and supply chain uncertainty
Hotels operate with tight profit margins, making them particularly vulnerable to supply chain disruptions and economic challenges like inflation. Vendor pricing can vary drastically from week to week, making it hard for hoteliers to anticipate procurement spend and stay within budgetary constraints.
Labour shortages and manual processes exacerbate the issue, resulting in longer procurement cycles, higher procurement costs, and less visibility into procurement activities. Customers, especially those who return, also expect a certain level of quality and service. This is challenging to navigate from a procurement perspective when supply chains are unreliable.
E-procurement software can address these concerns, keeping costs down while maintaining consistent customer service. According to BCG, on average, digital procurement tools can reduce annual costs by 5% to 10%. They do this by centralising and automating procurement processes, from sourcing vendors to managing invoices, in a single platform. This approach has several benefits, allowing hoteliers to:
- Automate laborious tasks such as comparing vendors, negotiating contracts, approving invoices, or making payments.
- Predict price fluctuations and inventory shortages.
- Access procurement data and insights for smarter decision-making.
- Strengthen supplier relationships and improve customer satisfaction.
- Shorten procurement cycles and maximise ROI.
10 Must-have features for your e-procurement investment
Every business has unique procurement requirements and challenges. However, an ideal e-procurement solution will allow your hotel to make more strategic spending decisions and improve your bottom line without overextending finance and operations teams. Here are ten essential features that every hotel’s e-procurement software should provide.
1. Full procure-to-pay cycle support
To get the most value for your investment, use a tool that covers every stage of the procurement cycle. For most hotels, this includes identifying needs, sourcing and comparing vendors, submitting purchase requests and orders, completing accounts payable, and performing spend analysis. Unifying these processes in a single platform makes monitoring the entire procure-to-pay (P2P) cycle faster and easier. The most effective e-procurement solutions also allow you to automate processes, such as purchase order approval and contract management, to save time and reduce errors.
2. Centralised vendor management
An effective e-procurement solution should house all of your procurement history. This simplifies keeping track of your supplier relationships, as well as reordering goods and services and comparing vendors. Choose a solution that updates pricing and vendor information in real time so that you always have access to current data.
3. Inventory management
Keeping your inventory sufficiently stocked is key to providing consistent customer service. Some e-procurement software offers inventory management features, which automatically track inventory levels and alert you when volumes are low. Your culinary operations can also be optimised by leveraging a recipe management solution to create, organise, and update recipes and menus, with direct POS integration for automated stock depletion.
4. Spend controls
Industry experts suggest that purchasing outside of a formal procurement process — also called maverick or rogue spending — can account for up to 80% of a company’s invoice expenditures. Hotels must reduce maverick spending as much as possible to lower costs and avoid even tighter profit margins. If this is a concern for your hotel, find e-procurement software with spend control features. These allow administrators to set strict spending guidelines based on an employee’s role, location, and other relevant parameters to keep purchases in line with your hotel’s financial goals.
5. Invoicing
Automating invoice approval and payment can save your hotel’s accounting team a significant amount of time and resources. While digital invoicing software is widely available, e-procurement software often has this feature built-in. This makes it easier to manage and organise invoices while reducing accounts payable costs.
6. Integrations
E-procurement consolidates procurement processes for greater efficiency. You can streamline procurement further by using a solution that integrates with your existing tech stack, which may include accounting software, enterprise resource planning (ERP) systems, communication tools, and other fintech. For example, if you already use vendor management software, consult with your IT team to make sure that e-procurement solutions of interest can integrate existing vendor data. This ensures that the data remains consistent between both solutions and that personnel don’t need to manually reference both tools to get the information they need.
7. Data analysis and budget management
For top-performing businesses, the P2P cycle doesn’t end with payments — it also involves evaluating procurement activities to make continuous improvements. Consider e-procurement tools that generate insights and reports to provide more transparency over your spending and approval systems. This will prevent your procurement team from performing quarterly or year-end analyses manually and give you reliable information for strategic procurement decisions.
8. Data security
According to IBM, the average global cost of a data breach in 2023 is over £3.6 million, a 15% increase since 2020. A data breach can not only cripple hoteliers financially but also jeopardise their reputation and customer loyalty. Make sure that your prospective e-procurement tools handle data responsibly and verify that the software adheres to your hotel’s policies surrounding company data.
9. Accessibility
Reskilling workers and other implementation efforts are some of the top barriers to hotels when it comes to adopting technologies such as e-procurement. Your hotel can’t reap the efficiency and cost-saving benefits of e-procurement if your staff don’t know how to use the software or aren’t using it to its full potential. Prioritise solutions that are user-friendly, even for personnel without a tech background.
10. User support
Along with software accessibility, consider how the e-procurement software provider offers user support. Your workforce may benefit from features such as:
- Expert customer support communications
- Full-service onboarding and training
- Virtual tutorials and courses
Adopting a solution that offers comprehensive, ongoing support will improve staff usage rates and ensure that your hotel’s procurement team is making the most out of its investment.
Takeaways
E-procurement software is a top priority for leading hoteliers who aim to streamline procurement operations, improve profit margins, and give guests consistent, reliable service. When comparing e-procurement solutions, use these software features as baseline requirements. From there, consider additional features that address your hotel’s unique procurement challenges and requirements.
If you would like to learn more about hospitality e-procurement and FutureLog, you can contact one of our industry expert advisors to schedule a demo. Our team of professionals specialise in eprocurement and can offer personalised guidance and advice based on your goals. They can provide detailed explanations of how e-procurement can improve your hotel's bottom line and how FutureLog can address your unique needs and challenges.
About the Author:
Johannes Vocke is the Chief Financial Officer at FutureLog, the leading global cloud-based procure-to-pay platform for the hospitality and gastronomy industries. Prior to joining FutureLog, Johannes spent over a decade at prestigious Big 4 firms spanning Germany, the U.S.A. and Switzerland, working primarily on professional audit services and honing his skills in finance. With an M.Sc. in Accounting and Taxation from Mannheim, Germany's #1 Business School, and a B.Sc. in Economics and Law from the University of Münster, Johannes is responsible for leading all strategic financial initiatives across the organisation and is driven by his passion for innovation, analytics, and process optimisation. In his free time, he enjoys travelling, exploring the great outdoors (sometimes on foot, sometimes on his motorbike!), and is an avid festival-goer. Connect with Johannes on LinkedIn.
About FutureLog
FutureLog provides a fully integrated, cloud-based procure-to-pay platform for the hospitality industry. We facilitate an end-to-end procurement process from purchasing, through inventory management and up to invoice processing; all available in one platform to save you time and money. The FutureLog procure-to-pay platform is the foundation for seamless connectivity between Hotel Operations, Corporate Centres and Suppliers.
Suzanne Ward
Vice President Digital Marketing and Communication
+41 41 759 1861
FutureLog