Procurement is undergoing dramatic change and organisations are embracing new models of business in order to avoid falling behind their competitors. Driving this change is an environment of increasing uncertainty and risk, a greater need for spend visibility and analytics and the adoption of cloud based procurement software.
The challenges facing procurement teams
According to the Deloitte 2018 Global CPO Survey, over 40% of respondents see renewal of eProcurement technology as having most impact on the business in the next two years.
CPOs looking to control risk need accurate and complete data if they are to make the right choices in crucial business decisions. Companies that still rely on poor ERP systems or manual systems will find it difficult to capture all the data they require and need to look at implementing eProcurement solutions that streamline and capture critical data.
In addition to cutting costs and protection from risk, CPOs are becoming increasingly focused on meeting the demands of internal clients: making it easier to procure across all categories of products and services. Whilst CFOs are looking for accountability and measurable success.
Opportunities to stay one step ahead
Procurement teams that focus on adding value by helping their internal customers to buy better will be perceived more positively than those that continue to focus only on managing their relationships with suppliers. To achieve this goal it is essential to implement the right tools for a responsive procurement experience. At the very least, the right tools need the facility to facilitate a purchase and accurately measure cost.
Many companies, relying on manual processes or ERP systems that do not align well to the business, simply cannot define their costs; “We think we spend between 50 – 250 million euros on certain Indirect categories of products, but we just don’t know” admitted the head of procurement for a large group.
The future of procurement technology
Take a look at our article on Technologies that impact Procurement if you want an insight into the range and depth of technologies that will have an impact.
The procurement industry faces many challenges, however the adoption of cloud based procurement software will benefit organisations by providing a flexible solution that can be focused at specific areas of Procurement to achieve maximum return on investment.
There is a growing recognition that procurement decisions have an impact on profitability, not just through cost saving, but through driving strategic decisions, serving internal customers and controlling risk. See our article on 5 steps for Procurement to impact on financial results