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In the wake of Covid-19, businesses are more aware than ever of the need to ensure their supply chains are responsive and agile. Even as many return to ‘business as normal’, companies are rapidly digitising processes to safeguard their continued operation.
Moreover, even with Covid aside, the rapid pace at which new digital solutions are being introduced means that the traditional procurement process is quickly evolving, opening the door to enhanced saving opportunities, improved organisational efficiency and supply chain transparency.
So, is your procurement strategy is future proof? Fear not, our team of expert procurement professionals have put together the latest trends in procurement, including the rise of AI and a more proactive approach towards contract management.
What is Digital Procurement?
Digital procurement refers to the use of new or disruptive technologies to simplify existing procurement activities. It can allude to a wide range of technology solutions including the use of AI technology to automate purchases and transactions, analytics tools to amalgamate and analyse datasets and cloud-based software’s to enable organisational transparency and remote working.
Core Procurement Technologies
Whilst the industry shows no signs of decreasing the amount of emerging technology solutions for procurement professionals, many core products have already reached the maturity age of their lifecycle (meaning that they have been employed by the majority of organisations). As such, it is these solutions which businesses must ensure they adopt to remain competitive within the market. Such core technologies include:
· Spend Analytics tools are used to cleanse, validate, segment and report on spend data. These tools help to increase efficiency by pulling data from all your source systems to provide accurate, actionable information, with granular, item-level visibility across the enterprise.
Interested in Spend Analytics? Check out the Arrowhead Spend Analytics tool here!
· eProcurement, also sometimes referred to as supplier exchange, is the use of a web interface or network system for the purchase of supplies, equipment, works and services.
· Contract Management Systems (CMS) are employed by organisations to streamline the review of long and complex supplier contracts, and to store all contracts in a single place. They help to increase the speed and accuracy by which a procurement professional or stakeholder can navigate, search, and edit an agreement both within the negotiation phase and throughout the duration of a contract.
· eSourcing is the use of web-based technology to source, evaluate and select both existing and prospective suppliers. Using eSourcing software, buyers collect information about suppliers, their products and their pricing.
Emerging Trends in Procurement
Beyond the core technologies, for those businesses looking to pull ahead of their competitors, a plethora of new tools and software have also gained significant traction in the last twelve months. Such solutions include:
· Automation with AI and RPA Technologies
Artificial intelligence (AI) and robotic process automation (RBA) technologies have seen rapid uptake in the last year, as many businesses look to cut unnecessary human labour. Such technologies are predominantly utilised to manage repetitive processes such as inventory management and payments, helping organisations to increase efficiency and reduce the occurrence of costly human error.
· Blockchain technology
Most associated with Bitcoin and other virtual currencies, Blockchain technology is quickly being recognised across multiple industries for its use in supply chain management – allowing stakeholders to track a product or service from source to acquisition and payment.
Amongst its numerous appeals to businesses, blockchain technology can be utilised to simplify complex transactional relationships and achieve greater levels of organisational efficiency and inter-party transparency.
· Tapping into tail spend
With the rise of spend analytics tools, the ability to gather, sort and analyse even minute data has become easy, allowing organisations to turn their attention to tails pend and the associate cost benefits. Read our recent article on tail spend for a more detailed overview here.
· Cyber security
With a shift to remote working and the coinciding cloud software solutions comes increased risk surrounding cyber security. Superior security solutions are also an effective way for organisations to reduce risk and save potential costs associated with data breaches.
View our recent article on cyber security procurement here.
Benefits of Digital Procurement or Procurement 4.0
As competitive advantage between companies increasingly becomes hinged towards technological capabilities, it’s imperative that organisations strive to digitise their procurement activities to realise the opportunities afforded by such technologies. With spend analytics tools, businesses now have access to more data than ever to inform their procurement strategies and drive cost leadership amongst their competitors.
Forecasting tools can also help organisations to assess potential risks– particularly those imposed by external factors – so that they can respond accordingly.
Further to this, CMS tools are also driving a new focus on contract compliance, ensuring that organisations can reap the greatest value through supplier contracts and track performance in real-time.
Where we can help you
We can help your business understand what your true requirements are before you make any decisions. Our expertise allows us to assist you when it comes to utilising proper procurement practises that will pay dividend. We can guide you in reviewing your existing technology contracts and what to look for in new ones, so you avoid any automatic price increases, capacity limits, cancellation restrictions and beyond.
Choosing the best vendor for your business can be an overwhelming process. We can help with market research and negotiating price to get you the best deal because we have an extensive knowledge of the market. Once you have decided on your IT requirements and defined the products needed, we can assist with researching appropriate suppliers, contacting them for formal proposals, negotiating your terms and ensuring that penalties are in place if a supplier doesn’t perform. We also offer to oversee the project from start to finish –managing your contracts and leading the transition process to ensure that new systems are delivered on time without supplier disputes.
For further advice or an initial consultation please get in touch.
