The global coronavirus pandemic has brought millions of businesses the world over to a grinding halt. In May 2020, The Washington Post reported that “over 100,000 small businesses had closed forever as the nation’s pandemic toll escalated.” Operations have slowed down as companies ask what is source to pay process under the “new normal”? Supply chains have been disrupted forcing many businesses to look locally for raw materials. Needless to say, sourcing teams have found it incredibly difficult to navigate around the restrictions and closing of borders. So, what does source to pay mean under these new conditions? Let’s explore.
1. Sourcing Teams Have To Find Local Suppliers
The United States imports massive amounts of raw materials from suppliers in Canada, China, Germany, Japan, and Mexico. These five countries provided nearly half – 48% – of the goods imported into the country in 2019. Bringing in raw materials already costs the US at least $2.5 trillion every year.
With the closing of borders, this means procurement teams have to find local suppliers for their raw materials and this isn’t always the cheapest option. In this new age, sourcing teams have to be more diligent in their source to pay operations in order to keep costs low particularly when comparing local suppliers.
2. Procurement Teams Can Work From Home Offices
We see the importance of cloud-based digital solutions in the procurement industry now more than ever. At a time when people cannot work from their business offices, tech solutions with cloud functionality such as ProcurePort RFX software and reverse online auction software have proved to be invaluable resources.
Sourcing teams can issue the Request for Information, Request for Proposal, and Request for Quotes to suppliers even from the comfort of their own homes. E-auctions can also be hosted by procurement teams who aren’t necessarily working at the main office. When attempting to answer what does source to pay mean during COVID, these are examples of what procurement teams are doing to keep operations running during these unprecedented times.
3. Negotiations Done Via Video Conferencing Software
With many stakeholders, procurement teams, and suppliers operating from remote locations in order to maintain the global isolation efforts, a new trend has been on the rise – tele-negotiating and contracting. Owing to video conferencing software such as Zoom, teams have been able to discuss important matters with their suppliers via video calls and so keep things moving.
This approach hasn’t been without its challenges as many businesses have raised concerns about security and privacy issues when using platforms like Zoom. Nothing can ever really replace in-person meetings. Given the particular circumstances, however, many procurement teams have simply adopted video conferencing as part of what does source to pay mean under the “new normal”.
4. Demand For Reliable, Safer Sourcing Solutions
Did you know that there is a cyber-attack carried out every 39 seconds and that 30,000 new websites are hacked every single day? With nearly every facet of source to pay operations being done electronically, businesses are opening themselves up to cyber threat agents. The need for safe and secure platforms is clear. Cybersecurity is a major cause of concern for all companies. And it doesn’t take a lot for a company to fall prey to a cyber-attack.
A single vulnerability such as the compromised user account that unauthorized third parties used to infiltrate shipping brokers Clarkson Platou’s company systems in 2017 is all it takes for an entire network to be compromised. Despite having sensitive information copied from their networks, Clarkson Platou refused to pay a ransom to have the information restored.
Danish conglomerate Maersk on the other hand wasn’t so fortunate. Their global operations came to a standstill in an indirect cyber incident that cost them $300 million. This affected everyone along their supply chain and was a wakeup call to companies about the grave importance of investing in secure cybersecurity and procurement e-solutions.
Safe, Secure, Trusted Procurement Solutions
ProcurePort leads the way in providing safe, secure, and reliable procurement e-solutions. From contract management software, reverse online auction software to RFX templates, our wide-reaching technologies can help teams adjust to operating in these troublesome times without fear of security breaches. Request a demo to see our solutions in action or contact one of our team members for customized options.