Posted in Financial Process Automation

The 8 Top Procurement Trends For the 21st Century

Recent advances in technology are creating profound impacts on many businesses activities. In particular, digital transformation is rapidly changing back-office operations such as supply chain management and procurement. Digitally transformed organizations increase efficiency, lower cost, and adapt to fast-evolving customer expectations.

To stay relevant, competitive, and profitable, businesses need to keep pace with new technologies. Procurement is no exception. New technologies facilitate e-procurement, contract repository, supplier performance management, spend analysis, supplier information management, AP automation, business networks, contract authoring, and more.

Today, the kinds of software, hardware, and peripherals available has exploded. It’s not always easy to identify the right technologies in which to invest so you can maximize the ROI for your IT budget.

To get the most out of the latest technologies, you must first understand the top trends that are impacting the procurement process. That will help you select the right tools that meet the needs of your organization.

Top Technology Trends In Procurement 

Here are some key areas in which technologies are helping organizations increase cost-efficiency while improving customer satisfaction in the procurement process:

1. Cloud-Based Procurement Software

Cloud computing and SaaS products are used to support many business operations and procurement is no different. Organizations can take advantage of the subscription model to access the latest software without additional costs.

Cloud-based platforms are allowing companies to lower upfront investment, reduce overhead, and enhance real-time information sharing. Employees can access applications from anywhere and at any time. That helps organizations improve productivity and stay competitive in the global economy.

Request a demo of our modern, cloud-based software.

Many new providers have entered the market with a variety of flexible and scalable Procurement-as-a-Service solutions. Organizations can now incorporate new technologies into their existing processes cost-efficiently.

2. Microservices and Low-Code Platforms

The above-mentioned widespread use of cloud computing makes it cost-effective for companies to leverage APIs (application programming interfaces) and microservices. Organizations can integrate various applications with their current systems. They can facilitate information exchange and automate processes without the need for custom coding.

These low-code platforms reduce the need for the IT department’s assistance to implement changes in the system. In turn, that allows business users to have a higher level of flexibility and autonomy. For example, they can use a visual, drag-and-drop interface to manage workflow automation to optimize efficiency. 

Existing all-in-one platforms will evolve to provide more flexibility to users. They’ll have the ability to mix and match various applications. That makes it easier to create a platform customized to the needs of the businesses. Companies will no longer pay for features that they don’t use.

Sign up for a free 30-day trial.

3. Data Analytics

Deloitte’s Global Chief Procurement Office Survey indicated that analytics will have the greatest impact on the procurement process. Organizations that participate in the survey plan to use data analytics for cost optimization (50%), process improvement (48%), and management reporting (45%.)

A data-driven approach will help businesses gain insights into and devise innovative solutions for modern challenges. They’ll reduce uncertain decision-making, inefficient use of resources, etc., to demonstrate the value of procurement and drive organizational changes.

The key to leveraging an analytically-driven approach in procurement is to embed analytics into the decision-making process instead of treating it as a separate project. 

4. AI-Driven Technologies

The availability of data means businesses need the ability to process the large amount of information in real-time so they can make accurate data-driven decisions.

For example, AI can be used to source vendors and aid contract management by analyzing key metrics for renewal and performance. Machine learning can be used to facilitate review and approval processes, as well as update catalog or contract data on products, materials, and suppliers to minimize errors. 

IoT devices can be used to monitor the movement of physical assets along the supply chain to optimize operational efficiency. AI-powered chatbots can provide inquirers with instant insights to aid better decision-making and facilitate customers’ purchasing experience.

5. Collaboration and Communication Tools

In order to stand out from their competitors and attract more customers, organizations need to break down internal silos. By using the right collaboration and communication tools, companies can support a customer-centric procurement process that delivers a seamless purchasing experience.

Organizations can drive productivity and increase cost savings by streamlining internal collaboration. They can strengthen supplier relationships and reduce supply chain risks by improving external communication.

Also, many collaboration tools enable real-time information sharing across the entire organization. For example, you can link the “transactional” and “administrative” sides of the procurement process. That lets you increase operational efficiency while reducing errors and delays caused by transferring data and files manually.

6. Mobile Services

Mobile devices, such as smartphones and tablets, are now an integral part of our lives. They have also become indispensable business tools for procurement specialists who often spend a lot of them away from their desks.

Mobile devices and mobile-friendly services allow users to manage the procurement process from anywhere with an Internet connection. It augments the benefits of cloud computing by increasing the accessibility of various digital tools.

As more millennials take on decision-making roles, the demands and expectations for mobile services are only going to rise. In fact, 42% of organizations plan to invest heavily in mobile technologies to support procurement activities. As before, mobile helps improve cost efficiency and productivity.

7. Self-Service Portals

The new generation of procurement system will be user-driven instead of office-controlled. As more buyers prefer to interact with businesses via self-service portals, over 70% of companies are investing in such technology.

Self-service portals help improve customer experience, customer satisfaction, and customer retention. They also allow companies to lower cost and improve efficiency.

In particular, many organizations will focus on using self-service procurement platforms to enable end-users to execute non-critical purchases and manage their account information. This frees up procurement resources and personnel to handle complex transactions. They can deliver a far more personal and effective purchasing experience.

8. Automation

A recent poll found that 63% of procurement leaders consider automation a key priority in their digital transformation initiatives. Many of these efforts involve the use of AI-driven technologies such as machine learning and predictive analytics. These technologies help organizations analyze a large amount of data quickly. The resulting insights increase operational cost-efficiencies while responding to market demand in a nimble manner.

Two kinds of automation can be applied to the procurement process. Business process automation (BPA) focuses on the end-to-end process to enable faster and more accurate decision-making. For example, you can streamline operations with purchase order automation or improve customer experience with sales order form automation.

On the other hand, robotic process automation (RPA) facilitates repetitive, manual, and low value-add individual (e.g., data entry). It’s intended to reduce labor cost and minimize human errors.

With the aid of automation technologies, organizations can identify business needs, mitigate risks, eliminate repetitive processes, facilitate suppliers management, track spending, and predict market demand in real-time to improve the bottom line.

Final Thoughts

The many technologies that are used in various procurement activities today are converging to complement each other’s effectiveness. 

The business world is rife with new technologies – from cloud computing and native mobility to social collaboration and AI-aided decision-making. Organizations need more than transactional tools to effectively manage their increasingly complex procurement workflows.

In turn, organizations can leverage the procurement process as opportunities to add more value to the business. At the same time, they can transform themselves into customer-centric organizations that will thrive in the next decade and beyond.

Automate your procurement processes easily.

Leave a Reply