5 Advancements in Procurement Technology That Needs to Adopt Now
Constant change is vital to keep every business up and running. The procurement department is no exception. The call for procurement teams to play a more strategic, tech-enabled role is growing louder.
Earlier, procurement teams had two major focuses: cost reduction and risk mitigation. With the rise of automation and cloud services, they now also need to focus on efficiency, accessibility, and sustainability of purchasing decisions.
Procurement teams need to level up their game by reinventing traditional processes and embracing new procurement technologies.
As the fusion of technology and procurement is gathering momentum, here are five future of procurement technology advancements that every organization needs to adapt now to stay competitive.
1. Cloud-based platforms
Procurement needs to move completely to the cloud. According to a recent CPO survey, cloud-based procurement platforms are no longer considered the bleeding edge of technology–they are pretty mainstream.
With several traditional enterprise providers embracing a cloud strategy and an array of new providers entering the market, moving to the cloud is inevitable. With investment in cloud procurement rising up, the migration to the cloud is gaining momentum.
A flourishing global procurement technology solutions market that is expected to grow to $3.2 billion by the end of 2020 is also fuelling this trend. Lower barriers to entry connected with cloud technology have paved the way for a competitive and innovative yet disruptive market.
The enterprise market is consolidated with leading providers like SAP (Ariba and Fieldglass) and Basware, which offer single-tenant cloud, on-premises, and hybrid solutions.
Adopting an analytically-driven approach in procurement is no longer a revolution, just a part of the evolution. The challenge procurement teams face is that there has been little to no change in the past.
However, a Deloitte Global CPO survey claims that analytics will have the greatest impact on the procurement process in the next two years. The survey respondents use analytics for cost optimization (50 percent), process improvement (48 percent), and management reporting (45 percent).
As organizations start demanding more from their procurement teams, analytics provide an innovative solution to tackle ongoing challenges like uncertain decision-making, an inefficient use of resources, and more. To get the most of out their procurement teams, businesses need to find a way to embed analytics into their decision-making process rather than treating analytics as a project.
Earlier, most procurement leaders had a difficult time making the case for their role in strategic development. With data-driven insights from procurement technology, procurement leaders can demonstrate more value and drive organizational change.
This decade has seen a shift in the purpose of procurement technology. What started as an extension of legacy ERP software with purchasing modules in the 1990s, has evolved to become easily accessible systems of collaboration and procure-to-pay solutions.
Initially, solutions were primarily on-premise, but they had no ‘ease of use’ features. As vendors started entering the procurement space in different directions, there were an array of products focused on niche functions like strategic sourcing, acquisition, etc. These stand-alone bleeding-edge technological products did nothing to address one challenge: collaboration.
"A next-generation procurement organization is effective and efficient–streamlining processes, exploiting technology, and enabling active collaboration with stakeholders to achieve strategic goals and create sustainable value."
P2P suites became the postmodern procurement technology that offered diverse options to automate and link the ‘transactional’ and ‘administrative’ side of procurement through collaboration.
In order to move out of the traditional buyer role and deliver strategic value to the business, procurement teams need to be collaborative; both internally (with other business units) and externally (with suppliers). Internal collaboration will drive productivity and continuous savings while external collaboration will strengthen the supplier relationship and reduce supply chain risks.
Mobile phones have become an integral part of our life, and not just for personal communication. Procurement needs to embrace this rapidly accelerating trend, allowing stakeholders to take part in procurement functions at any time from anywhere in an efficient way.
The demand and expectations for mobile services are steadily rising up with the increasing millennial population in the workplace. Nearly 42 percent of organizations are investing in mobile technologies to support procurement activities.
Mobility should be a part of every organization’s procurement strategy. When a business selects a cloud vendor, mobile-enabled services should be considered as a key feature. High adoption rates are essential to extract value from mobile service delivery, and that would be possible only when your procurement app provides a rich user experience.
5. Digital procurement
A number of organizations have placed an emphasis on shifting to a digital approach to operations, and procurement is an area where this poses immediate advantages. Many companies have already started taking the digital path to accomplish various procurement functions covering the entire procure-to-pay cycle.
By embracing this approach, you can move your procurement team from mundane tasks and let them focus on high-impact, value-driven activities. A digital procurement process will remove inefficient, time-intensive aspects of procurement, and make it more efficient.
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Using Kissflow Procurement Cloud to transform procurement
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