Advancing technology has significantly affected business operations, specifically back-office operations, such as procurement and supply chain management. Digital transformation in these business activities has reduced operations costs, increased efficiency, and made it easy for businesses to adapt to the rapidly changing customer expectations.
Businesses should keep pace with these technological changes to match competition, stay relevant, and generate more revenue. Emerging technologies have enabled e-procurement, AP automation, contract authoring, supplier performance management, and more in business procurement. Currently, effective procurement software, hardware, and other peripherals have exploded.
However, choosing the right tools and maximizing the benefits of these latest technologies requires that you understand the top trends affecting the procurement process. Below are the top procurement and sourcing trends.
The procurement process can leverage both business process automation and robotics process automation. Business process automation (BPA) focuses on the end-to-end business processes for fast and precise decision-making. For instance, businesses can adopt purchase order automation to streamline their inventories or sales order form automation to improve customer experience.
Robotic process automation (RPA) eliminates manual, repetitive tasks, such as data entry. This reduces labor costs and eliminates the possibility of human error. These technologies help businesses accurately identify specific business needs, eliminate repetitive business activities, track daily spending, predict the market, and improve their bottom line.
Streamlined external communication also boosts supplier relationships and eliminates supply chain risks. Fortunately, modern communication tools allow real-time data sharing across different departmental teams. Businesses can easily link administrative and transactional departments of the procurement process. This boosts operational efficiency and reduces errors or delays associated with the manual transfer of files.
Proper use of data eliminates the guesswork in decision making and inefficient allocation of resources. However, businesses should embed data analytics into decision-making processes to get the best from data-driven approaches.
Mobile devices also augment the benefits brought by cloud computing. The demand for mobile devices is poised to increase as more millennials assume decision-making roles in procurement. This explains why 42% of businesses intend to invest in mobile technologies for their procurement activities.
Cloud options provide company employees unlimited access to vital organization apps. They can access them anywhere. This boosts employee morale, improves productivity, and helps businesses stay competitive. New providers on the market provide various flexible procurement-as-a-service options, which can be scaled to meet company needs.
Businesses should proactively identify and analyze procurement risks caused by external sources, such as economic trends or changing regulations, and risks within their control, such as customer experience and retaining top talents. Businesses should also understand that previous procurement risks fade as new risks occur.
Therefore, organizations should develop an ongoing risk analysis and mitigation efforts that re-prioritizes supply chain risks. Similarly, they should always watch out for indicators of change to avoid being surprised. Using pattern recognition software can help.
Businesses should keep pace with these technological changes to match competition, stay relevant, and generate more revenue. Emerging technologies have enabled e-procurement, AP automation, contract authoring, supplier performance management, and more in business procurement. Currently, effective procurement software, hardware, and other peripherals have exploded.
However, choosing the right tools and maximizing the benefits of these latest technologies requires that you understand the top trends affecting the procurement process. Below are the top procurement and sourcing trends.
Process Automation
According to a recent poll, more than 63% of procurement officers have prioritized process automation in their digitization efforts. Most of these initiatives are centered on using artificial intelligence-powered technologies, such as predictive analytics and machine learning technologies. Adopting these technologies helps businesses analyze large amounts of information, which increases operational efficiency.The procurement process can leverage both business process automation and robotics process automation. Business process automation (BPA) focuses on the end-to-end business processes for fast and precise decision-making. For instance, businesses can adopt purchase order automation to streamline their inventories or sales order form automation to improve customer experience.
Robotic process automation (RPA) eliminates manual, repetitive tasks, such as data entry. This reduces labor costs and eliminates the possibility of human error. These technologies help businesses accurately identify specific business needs, eliminate repetitive business activities, track daily spending, predict the market, and improve their bottom line.
Increased Adoption of Communication and Collaboration Tools
Companies should break down the existing internal silos to stand out from the competition and attract more prospects and customers. Choosing the right communication and collaboration tools can help companies achieve a client-focused procurement process. Though often overlooked, businesses can improve productivity and reduce operations costs by streamlining internal communication and collaboration.Streamlined external communication also boosts supplier relationships and eliminates supply chain risks. Fortunately, modern communication tools allow real-time data sharing across different departmental teams. Businesses can easily link administrative and transactional departments of the procurement process. This boosts operational efficiency and reduces errors or delays associated with the manual transfer of files.
Data Analytics
The effects of big data can be felt in all sectors. A Deloitte survey found that data analytics significantly impact the procurement process. Companies that responded to the survey said that they plan to use big data to improve management reporting (45%), cost optimization (48%), and process improvement (50%). Data-driven strategies help companies gain better insights and implement innovative solutions to business challenges.Proper use of data eliminates the guesswork in decision making and inefficient allocation of resources. However, businesses should embed data analytics into decision-making processes to get the best from data-driven approaches.
Adoption of Mobile Services
Smartphones, tablets, and other mobile devices have become indispensable tools for procurement officers who spend most of their time away from their offices. Mobile devices allow procurement specialists to handle procurement processes on the go.Mobile devices also augment the benefits brought by cloud computing. The demand for mobile devices is poised to increase as more millennials assume decision-making roles in procurement. This explains why 42% of businesses intend to invest in mobile technologies for their procurement activities.
Cloud-Based Procurement Software
Cloud computing has supported most business activities, and procurement isn’t an exception. An easy way for businesses to take advantage of cloud computing is by subscribing to the latest automation software. Cloud-based solutions allow organizations to enjoy low upfront costs and reduce overhead expenditures, while enjoying real-time functionalities.Cloud options provide company employees unlimited access to vital organization apps. They can access them anywhere. This boosts employee morale, improves productivity, and helps businesses stay competitive. New providers on the market provide various flexible procurement-as-a-service options, which can be scaled to meet company needs.
Risk Management
The procurement and supply chain processes are vulnerable to various disruptions that traditional countermeasures, such as signing long-term contracts, won’t protect. For instance, in 2021, suppliers of one-third of the companies surveyed declared Force Majeure to their contractual obligations.Businesses should proactively identify and analyze procurement risks caused by external sources, such as economic trends or changing regulations, and risks within their control, such as customer experience and retaining top talents. Businesses should also understand that previous procurement risks fade as new risks occur.
Therefore, organizations should develop an ongoing risk analysis and mitigation efforts that re-prioritizes supply chain risks. Similarly, they should always watch out for indicators of change to avoid being surprised. Using pattern recognition software can help.
