How has technology impacted procurement and sourcing in the supply chain?
Technology has revolutionized every industry and procurement is no exception.
With increasing pressure to mitigate spend and streamline processes, Chief Procurement Officers have turned to digital sourcing and digital solutions for help.
In fact, according to a global survey of 830 procurement professionals carried out by services provider Xchanging, the top two technologies the majority of CPOs have adopted are:
· Savings technologies (integrated by 77% of respondents)
· Spend analytics technologies (integrated by 76% of participants)
Technology’s importance in procurement will continue to increase as more robust software that promises to reinvent processes making it easier to carry them out emerges. Digital solutions won’t simply be an operational affair but will add strategic value.
So, without much further ado, let’s take a look at what digital sourcing is and some of the leading digital solutions for procurement.
What is Digital Sourcing?
The Chartered Institute of Procurement and Supply (CIPS) define sourcing as the business of:
“…assessing the market to identify viable suppliers able to meet the organization’s needs (such as quality, quantity, and speed of delivery).
Digital sourcing is therefore the process of finding and qualifying vendors using technology to streamline the process and move away from legacy manual operations.
Digital Solutions for Procurement
The major objectives of digital solutions in procurement are to:
· Digitalize legacy procurement processes
· Improve customer experience
· Reducing spend and costs
Digital solutions come in a variety of formats. Here are three key digital solution categories with examples:
1. Procurement software platforms
2. Process optimization software
3. Digitally enhanced services
1. Procurement Software Platforms
Gone are the days of cumbersome software installations from computer to computer by the IT department.
Today’s procurement software platforms present us with multi-faceted cloud-based digital solutions that manage devices, processes, linking sourcing teams to suppliers, while also running and developing other applications.
For example, ProcurePort developed the innovative procure-to-pay software with the desire to increase efficiency and drive down costs in mind. Fully electronic and automated, procurement teams can handle all operations such as e-requisitions, approvals, purchase orders, invoices, and payments on one centralized platform.
Sourcing teams have better visibility of the entire procurement process, can communicate with each other and vendors faster, and overall experience a smoother and more optimized process.
And speaking of optimization…
2. Process Optimization Software
As implied by the name, this particular type of software leans towards making procurement processes more effective. Process optimization software aims to increase the functionality of procurement functions.
Often provided as a cloud-based digital solution, process optimization software can be integrated into procurement operations to cover each stage of the source-to-pay lifecycle.
For example, the Request for Information phase of sourcing has always been known to be laborious and time-consuming. How could procurement teams qualify new suppliers more quickly?
Enter ProcurePort’s RFP-RFI-RFQ software. Designed to automate the Request for Information, Request for Proposal, and Request for Quote processes, this digital solution makes life increasingly simpler by providing a secure and automated platform that eliminates the need for manual processes of receiving bids and price quotes.
3. Digitally Enhanced Services
While technology has certainly been a catalyst for change, its rapid evolution sometimes means that enterprises aren’t always able to keep up with the latest developments.
Therefore, companies such as ProcurePort that already offer procurement digital solutions find it necessary to add to their existing service portfolio a digital service aspect.
ProcurePort has managed to successfully achieve this through the managed reverse auction service offering.
Realizing that digital solutions could potentially assist in saving on addressable spending, ProcurePort developed a state-of-the-art reverse auction software platform.
Delivered as a cloud solution, boasting easy-to-use sourcing software, and a user-friendly intuitive dashboard, the ProcurePort team onboards enterprises and their suppliers and effectively conducts e-Auctions on behalf of clients.
For enterprises thinking of adopting digital solutions, it’s never been easier than today.
Most of the emerging procurement technologies on the market require minimal investment, allow you to finally get rid of legacy systems, and have low integration requirements.
AI is changing sourcing and procurement and it’s only a matter of time before digital sourcing and digital solutions because the new norm for the majority of procurement teams.