Advancements in technology, business practices, and management demands are transforming procurement as we know it. This is causing a rapid shift taking place in the procurement industry as we know it. Below, are a few key procurement trends that will shape if not change the way Sourcing is perceived and implemented by organizations in the year ahead.
Technology infused Procurement
From initial requirement requests to contractors & suppliers, purchase orders and everything in between, there are a number of steps relating to the procurement process. Unfortunately, a number of businesses still use excel and email to manage the procurement process making it nearly impossible for them to keep track of everything going on in an efficient manner.
Procurement functions that depend on excel and email can’t keep up with the pace with modern fast-paced supply chain needs, especially because it is so prone to human error. Companies will consider going digital instead due to disruptive and easy to use cloud-based solutions for the procurement sector.
Advanced spend analytics, Insight, and Collaboration
Procurement solutions with robust spend analytics capabilities and built-in customizations can help organizations improve processes and make faster, data-driven decisions in collaboration with their teams. Increased focus on collaboration and a rising need for data backed reports is leading of more connected, agile groups using procurement tech tools that can help deliver smarter insights to management.
Increased Supplier Engagement
Supplier management is emerging to be a top priority for enhancing supply chains for organizations in every industry. To make the most out of existing supplier relationships and build new relationships, companies need to continuously drive innovation in terms of finding ways to build stronger relationships. The partnership between technology and procurement is helping companies assess supplier risk more efficiently.
Cloud-based procurement and sourcing platforms facilitate clear communication between buyers and suppliers. They also help in categorizing all suppliers in terms of transactional suppliers, collaborative suppliers, and partner suppliers, and optimize relationships accordingly. Relationship data with suppliers can easily be harvested from procurement technology solutions to reap large benefits in the long run.
Companies favoring simplicity over overbuilt, inflexible end to end suites
A best in class procurement technology solution needs to offer a niche solution for a particular area, but at the same time offer customizations to tailor the solution to the organization’s needs. This lets your team buy only those solutions that they need. Such solutions are often less expensive and do not require long-term commitments.
Best in class procurement and sourcing tools are also more likely to respond to market trends and provide new technology solutions faster. Technology solutions that have very focused offerings are much easier to develop and enhance from a development perspective. Moreover, services offered from large platform solutions frequently come at a cost, often require long-term contracts. This creates an inflexibility within your organization and greatly adds to the ultimate cost for your organization.
While the big brand names behind most platform solutions will guarantee a certain level of proficiency across all of your needs, it is rare that a platform solution will be considered excellent in any one area.
We think the procurement industry is up for the challenge in the above-discussed areas. What’s your take on the predictions shared here?
If your company is currently struggling with a few challenges in terms of procurement processes, chances are good that the entire business is feeling the consequences as a result. For more information about how we can help you, please do not hesitate to get in touch.