The top class procurement operation never fails to provide a competitive edge with far fetching results by utilizing the current technology at right time, in a right place, at a right point of business. This article focuses on the “current technology and innovation outlook of 2016-17” that sways current progressive solutions along with the emerging technology. This article also focuses on the latest technology that captures the interest of procurement executives involved across various verticals of procurement cycle. It relays on Ardent Partner’s research data and analysis designed to help Chief Procurement Officers (CPO’s) and mid-level procurement executives to understand current technologies and innovations, which shapes an optimal procurement strategy.
In any game, as in business, the skillful player are the ones who position themselves in the field, read the game and re-position themselves to positively impact the state of play and wait for the right opportunity to turn the game into their favor. This way, they not only win the game, but also establish a rapport, which is beyond expectations. In the similar lines, the executives have to be agile to tackle today’s challenges and dynamics. In procurement, the skillful player are the ones who not only bags the existing opportunity, but also secure themselves for the next five to six years comprehending their challenges, opportunities and risks and innovating the right ways to implement it.
Current Procurement Technology
331 CPO’s and procurement leaders participated in the survey conducted by the Ardent Partners in the year 2016. The survey reveals that procurement leaders are focused on cutting costs and increase savings. Besides, they are focused on array of priorities set for next three years. These include savings, which is a top priority for 40% of CPO’s, but also 34% of CPO’s aim towards improvising the process efficiency and effectiveness whilst 32% aim towards polishing staff capabilities. Technology and innovative ways addresses each of the aforesaid priorities. Hence, more than 37% of the CPO’s are showing interest towards investing in new technology that makes the procurement cycle simple, yet efficient.
It is not a hyperbole to say that existing and current procurement technology has been so strong that it can be expected to continue till the end of 2017. Although it is a known fact that most of the publicly-held companies are forgoing capital and are concentrating towards long-term investments, which is usually in the form of share buybacks and dividends, but the emergence of Software as a Service (SaaS) enabled CFO’s to manage the expenditure as it not falls under capital expenditure, but holds its position under expense line, which can be controlled at any point of time.
Image Source: http://www.basware.com/
Image representing technology adoption and outlook
As Ardent Partners says in their report, the four pillars of an efficient procurement system that drives all sourcing activity are spend analysis, sourcing, contract management and supplier management.
Spend analysis: It help procurement executives to amass the stream of spend data into a one-window dashboard where the data can be cleansed, modified, categorized, enriched, visualized and then dispersed to the decision makers.
eSourcing tools include reverse auction options that allows executives to conduct an array of sourcing activities over a consolidated digital platform. Through this platform, buyer can easily recognize and evaluate the commodity required and engage suppliers to source. Besides, buyers can also Raise RFQ (Request For Quote), Negotiate with suppliers and Close the contract within simple steps. The main agenda of eSourcing tools is to make purchasing simple and efficient.
Furthermore, other contract management tools include Digital contract authoring, which allows executives to reuse standardized contract templates, clauses and signatures to facilitate rapid contract authoring, review and execution.
Going forward, the Digital contract repositories allows to store the executed contracts in a central database where the top officials can easily retrieve them for far auditing, at any point of time.
The Supplier information management module, when integrated into the system appropriately, helps executives to maintain their supplier data, categorize and enrich them to maintain a single, yet polished database that gives accurate information about vendors thus enabling a transparent system.
Supplier performance management includes supplier surveys wherein an organization reviews, rate and track its vendors as per KPI’s (Key Performance Indicators).
On the bottom line, Procure-to-Pay and other automated strategies have helped procurement executives to align teams and processes to empower the cycle and seal leakages that may happen, otherwise.
eProcurement: It is one of the most anticipated tools that drives greater visibility by empowering existing contracts with vendors and save buyers from recreating the entire purchase cycle whenever they need to procure the same commodity or service. Modern eProcurement tools resemble online marketplace, such as CormSquare, where purchasing made simple by integrating plethora of innovative options in its software.
Tools such as ePayment are efficient to capture the interest of entrepreneurs, as it includes payment options like ACH, network transfers, wire transfer and commercial cards that acts as a synonym of transparency and control over payment scheduling.
Technology outlook for 2016-17
Although from many surveys conducted by various organizations concludes that adoption of eSourcing are at highest levels (58%) followed by eProcurement (56%) and ePayments (66%), a significant opportunity can be seen by adopting these technologies and other solutions. Aforementioned image clearly describes that most of the CPO’s are ready to invest in latest technologies and revamp their entire system over the next three years. However, according to the Ardent Partners prediction, in spite of a sharp global economic decline 2016 – 2017 sourcing and procurement technology remains strong and grow as expected.
It is a said fact that technology keep on changing with due course of time and it is essential for entrepreneurs to update themselves with the change. In order to get the expected results in fast-moving and highly competitive global marketplace, participants have to be interconnected to get the most from all opportunities that arise down the line. However, it is a challenge that how procurement organizations maintain their contact and relationship with internal stakeholders and external trading partners and how they utilize the existing and future technologies to empower their bottom line results. Adopting recent technology is far more important than ever and it has to be well-constructed and efficient to tackle various challenges and complexities.