Reviving procurement technology to meet today’s demands – Times of India

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Founder and CEO of Now Purchase
Procurement technology has become a default entity in many companies to manage the procurement of goods and services, suppliers, and budgets. Procurement technology is also becoming a new normal as it’s changing the way of work for many manufacturers and suppliers alike. Nowadays, procurement technology provides comprehensive integration, visibility, and controls for the enterprise. This helps purchase executives operate with more efficiency. However, change is crucial for any business that is looking to survive for the longest time in this world. Hence, the procurement department is no exception. Also, there is a need for the industry to evolve now more than ever.
The ongoing pandemic has affected global supply chains to a great extent. On top of that, the Russia-Ukraine war further worsened the supply chain crisis. A recent report highlights the fallout from last year’s shipping crisis and quoted a UN report predicting a 1.5% jump in global inflation due to shipping. Meanwhile, a report by the World Economic Forum says that the uncertainty remains high for supply chains in 2022. Despite all the uncertainties, many companies are looking to turn the tide and create more opportunities by making supply chains and procurement technology more resilient.
The entry of new tech
Earlier, the procurement department in any company had two major things to focus on: cost reduction and risk mitigation. But, with the increase in automation and cloud services, they are now also focusing on efficiency, accessibility, and sustainability of purchasing decisions. So, they need to amp their strategy by reinventing traditional processes and being more open-minded towards experimenting with new procurement technologies. So, in this article, we are exploring how the future of procurement technology is going to be and how it can be revived to meet today’s demands.
Procurement technologies are evolving swiftly, from emerging to mature, until widely accepted as core solutions. Many companies deploy various forms of core procurement technologies. These platforms usually include a combination of spend analytics, eSourcing, contract management, and eProcurement, among others. We will be understanding more about the technologies, which are expected to make a mark in the industry soon.
On the cloud
Cloud computing and SaaS (Software as a Service) products are used to support many business operations and they can help the procurement process as well. Companies can benefit from the subscription model to access the latest procurement automation software without additional costs. These platforms allow companies to lower upfront investment, reduce overhead and boost real-time information sharing. These platforms help companies improve productivity and stay competitive in the global economy.
Utilising data
The Global Chief Procurement Office Survey by Deloitte indicated that analytics will have the biggest impact on the procurement process. Companies that participated in the survey said they plan to use data analytics for cost optimization (50%), process improvement (48%), and management reporting (45%). A data-driven approach will lower uncertain decision making, inefficient use of resources, etc.
Bring in the AI
If you are wondering how artificial intelligence can save the day, it is like this: AI can be used to source vendors and help in contract management by assessing important metrics for renewal and performance. Machine learning can be used to facilitate review and approval processes. It can also be used to update catalog or contract data on products, materials, and suppliers to reduce errors. AI-powered chatbots can offer inquirers instant insights to aid better decision-making and facilitate customers’ purchasing experience.
Move with the mobile
Smartphones and tablets have now become an important part of our lives and they have become indispensable business tools for procurement specialists too. Mobile apps allow users to manage the procurement process from anywhere with an Internet connection.
It all comes together
Digital procurement solutions are allowing for many physical and digital inputs to be connected and this leads to better decision making and improved efficiency. This also leads to enhanced insights and strategies, resulting in accelerated cost leadership. Digital procurement solutions will also enhance process excellence, leading to greater organizational efficiency and effectiveness. On top of that, these solutions provide better assurance of supply, improved risk mitigation, operational efficiency, and greater collaboration.
Companies need to adopt these new technologies as they will make the procurement process easier and more efficient than before. These new-age technologies will help manufacturers procure better from suppliers while also providing intelligent insights into how they can make better use of their raw materials. They can also transform themselves into customer-centric organizations that will thrive in the next decade and beyond.
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Views expressed above are the author’s own.
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