Is your tech procurement process updated for 2022? Here’s how you know

Written by Seeed

03.04.2022

With a relatively rapid increase in technological advancements, procurement teams have been forced to transition from traditional processes to new procurement technologies so as not to be left behind. The COVID-19 pandemic has also had a huge influence on this transition.

And so, if you want to stay competitive these are the most important procurement technologies every team needs to succeed.

1. Cloud-based platforms

Companies initially viewed all in one procurement systems as sufficient but this view soon changed. Organizations realized these systems did not match the promised efficiency and convenience, and the systems required a lot of circumventing to keep things running without hitches. 

As a result, Procurement Teams ended up losing a lot of time and energy moving back and forth between interfaces. To solve this issue, Cloud Procurement Systems were introduced.

Which are the main advantages of Cloud Procurement Systems? 
    • The biggest advantage of Cloud Procurement Systems is their cost effectiveness.
    • Software as a service(SaaS) procurement solution or SaaS platforms do not require big upfront investments or a lot of maintenance. 
    • Cloud Procurement Software have an end to end integration capability. This does away with manual intervention and data redundancy. 
    • Cloud Procurement System’s quick data retrieval allows a seamless flow of information to all departments in an organization. This hastens the decision making process ultimately creating a seamless collaborative process
    • Cloud Procurement Tools are flexible to adapt to changes in the market. 
    • Cloud Procurement Systems also enhance visibility of the procure-to-pay process because organizations can track real time purchases. This enables organizations to enhance the efficiency of the process because they can see process gaps and resolve them.

Since most Cloud Procurement Systems are automated, there are Cloud Management and automation solutions to help in the management of the multiple Cloud Environments.

In addition, a CPO survey conducted recently has shown that cloud-based procurement platforms have been mainstreamed. This has been attributed to the lower barriers to entry connected with cloud technology. 

Some organizations have adopted multi-cloud architecture which utilizes the services of several cloud providers. Uses of multi-cloud architecture include disaster recovery, access to remote specialized hardware and resilience. 

The COVID-19 pandemic has been a huge driver for the adoption of multi-cloud architecture because it enables remote work and reduces business continuity risks.

2. Analytics

A CPO survey conducted by Deloitte Global predicts that analytics will have the most impact on the procurement process over the next two years. However, few Procurement Teams are making use of this data. 

Analytics are extremely useful to this process as a lot of insights can be obtained from historical data on product pricing ultimately placing a buyer in a better position during payment negotiations. 

Data analytics can also be used in the formation of an annual purchasing strategy, performance management, strategic vetting,vendor segmentation and to achieve cost savings.

On the other hand, algorithms are used to determine important drivers of price in more advanced analytics techniques. These drivers are clustered and show differences in vendor performance. 

And so, advanced analytics systems are advantageous in this way as the use of algorithms ensures they are unbiased unlike humans who go on instinct and gut feelings. 

Thousands of permutations can be done in seconds to make determinations. 

Therefore, businesses’ procurement teams should incorporate analytics into their procurement processes.

3. Collaboration

Procurement teams in businesses should be collaborative both internally and externally. 

Internally is with regards to collaboration with other business units, and externally is with regards to collaboration with other suppliers in the supply process. 

The former increases productivity and savings while the latter reduces supply chain risks and improves the supplier relationship. 

And so, organizations that have advanced procurement technology have realized the limitations of only concentrating on the price of products and services they can purchase.

The results of a collaborative effort…
  • A collaborative effort between buyers and suppliers unblocks significant benefits to both like the creation of new products which will ultimately boost profits and revenues for both. Both parties could also mitigate risks and improve service levels by planning together. Alternatively, they could jointly purchase raw materials or redesign their processes to achieve supply-chain optimisation. That’s why, organizations and companies that have worked with suppliers in these ways have seen greater profits, and lower operation costs in comparison to their competitors. Some of the obstacles of collaborative effort:It is important to note that collaborations are not so easy to achieve. One factor is the amount of time these collaborative projects require. A lot of time might be required before results can be seen of their joint effort. Therefore, most organizations give priority to less time intensive projects. 

     

  • Another obstacle is the adversarial mindset buyers and suppliers can’t seem to shake off. A collaborative effort requires both parties to be heavily involved inorder to be successful and this is made difficult by these kinds of attitudes.

    Another challenge is that often it is difficult to compute the precise value a collaborative effort generates. This especially so for companies that are involved in more traditional procurement processes. 

    Leaders of these companies can also be impediments to collaborative efforts because a lot have admitted to lacking the skills necessary to lead, navigate and design the structures needed for a collaboration. 

    More often than not the staff too lack these skills. 

    Despite all these, organizations stand to gain a lot from collaborations.

4. Mobility

In order for stakeholders to participate in procurement functions anytime they choose, mobility has become an integral part of every organization’s procurement strategy.

Procurement professionals also need to be able to have access to critical information and to contact key personnel among others while on the road. This is especially important during out of town meetings and conferences. 

Mobile enabled services have thus been a huge consideration even when organizations are choosing cloud vendors. 

Mobile enabled services enable procurement teams to do their jobs smarter, faster and to drive more value for their organizations. 

Mobile procurement would in the past have been hard to transition to but due to the COVID 19 pandemic a lot of businesses and people have embraced technology. Therefore, they are able to benefit from e sourcing and supply chain tools at will. 

However, a huge impediment to mobile enabled services is security concerns such as cybercrime. Without cybersecurity, cybercriminals can easily access organizations’ sensitive information. 

Another issue is that employees could mishandle critical data. 

Therefore it is important for businesses to take security measures to ensure this does not happen. 

You may also want to read: 

Business trends to watch out in 2022

5. Digital Procurement

Digitalization is the move from analog to digital, and Procurement processes have undergone Digital Transformations. As a result, digital procurement is the use of digital technologies to better the procurement functioning of a business. 

According to a survey done by the World Economic Forum, 80% of businesses are digitizing their work processes. Most companies’ entire procure-to-pay cycle has been digitized. 

This is due to digital procurement being more efficient, effective and less time consuming than the traditional procurement process. It has maximized productivity while minimizing expenses. 

Also through the use of artificial intelligence (AI), real time information has been captured and used to inform decisions pertaining investments. 

Digital procurement has streamlined routine tasks which had in turn freed up time for procurement teams to concentrate on more value driven and high impact tasks. 

Automation and digitisation go hand in hand. Automation coexists with digitalisation because one’s adoption leads to the others. Procurement processes such as purchase requisition, purchase order and invoice management are simplified by procurement process automation. 

As a result, productivity and efficiency improve and staff are no longer bogged down by redundant tasks. The time these processes usually consume is also lessened to a great degree. 

6. Customer Data Platforms (CDP) 

Information left behind by consumers as they interact with companies on the internet and offline is customer data. Customer data can be sourced from a single platform known as the customer data platform (CDP). It is a software that combines and organizes customer data. 

How does it work? 

Customer data platforms create customer profiles using collected customer data; this data is collected from different sources such as websites, social media activities, emails and web forms. 

The data falls under four main categories; identity data, descriptive data, behavioral data, and qualitative data. 

Not only is the data used by companies to guide marketing campaigns but also to guide company procurements. It helps businesses better understand supply chain needs and consumer needs. 

Customer insights combined with historical data enable procurement professionals to make data-driven procurement strategies in their business plans. 

Once companies understand how to use this data to make these strategies their profit margins will increase dramatically due to increased savings. There are several other advantages to making these data driven strategies. 

One is that it reduces the need for data analysis. Another is that it predicts supply chain disruptions thus mitigating risk. 

Finally, it optimizes performance to drive cost savings.

Final Recommendations

Companies and organizations this year should incorporate one or all these in order to be up to date with what’s going on in the procurement world. 

Choosing the right company to partner with in the implementation of some of these procurement technologies is imperative. 

At Seeed, we focused on providing digital transformation to large and medium-sized companies through e-commerce and Cloud Transformation, so you can achieve more remarkable performance in digital technology markets.

Explore all our services at: https://seeed.us/

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