The Changing World of Procurement - A Recap of The Changing World of Procurement Webinar presented by Supply & Demand Chain Executive, September 10, 2014
The following is a Puridiom recap of The Changing World of Procurement webinar presented by Supply & Demand Chain Executive. The points covered during the roundtable discussion have been summarized in order of the questions asked. Although the panelists were from very different backgrounds within the Supply Chain, they all reiterated the importance of procurement automation, visibility, supplier collaboration and communications.
The Changing World of Procurement webinar began with this brief introduction: Over the next decade, the way procurement is executed has to change. Organizations must identify all of their business entities, buying habits, cost information, benchmarking and more to obtain more real-time data in a predictive form. Without it, there will be knowledge loss as experienced supply management professionals leave the business; customer loss; being viewed as a less favorable supplier, less financial investment from shareholders; reduced market share; and a non-sustainable business model.
What Keeps You Up at Night?
Organizations today are seeking control, visibility, automation, optimization, and compliance in their supply chain and procurement processes. What is keeping them up at night is trying to figure out the best way to accomplish these goals with the right tools and processes.
Not surprisingly, a large number of those polled were not satisfied with their procurement operation and that may be due to the reasons stated above. Panelists believed that organizations today are being challenged at an even higher level to deliver results to C-level management, so they are constantly seeking more ways to improve the efficiency of their procurement processes.
Where does Big Data fit within Procurement Today and in the Future?
Big data has become a major driver of business strategy and a major driver of performance reviews. The challenge is in capturing the right data and using it well. Best-in-class procurement organizations that have full visibility into their spend now have the ability to use this data better, making it better quality procurement data. With this data they can track spending trends more closely and in real time, helping them to become more responsive and successful. This data can also be fed to several other critical systems and used as the core to business intelligence.
We are also finding data being enriched by third-party data sources, such as news reports, or financial information that could potentially help with sourcing decisions or avert supply shortages. This type of data is becoming increasingly available from either other integrated networks (payment information, feedback, ratings, etc.) or through third-party solutions. For more information on Big Data, read article.
How do you manage and communicate with suppliers?
Supplier collaboration and how suppliers interact with organizations is of great concern to procurement professionals. The informal poll during the webinar indicated that the majority of participants communicate with supplier via email and the smallest number is using supplier portals or third parties to communicate with suppliers.
All panelists agreed that better and faster communication with suppliers is a must for procurement today and especially in the future. The benefits of automating the supplier connection and collaborating with your suppliers far outweigh any initial difficulties of onboarding suppliers. Supplier portals increase efficiencies and communications, drive visibility and improve supplier collaboration. Other benefits to automating this process include enhanced decision-making based on having faster, more up-to-date information, as well as more accuracy, better document management, and more time to build real supplier relationships.
With more and more people “on-the-go”, out of the office, traveling, in meetings, commuting… basically not at their desks, the demand to use mobile devices in the workplace and have a convenient way to facilitate one’s procurement activity will naturally increase. The webinar poll seems to reflect this trend. As more companies embrace BYOD policies and IT departments mandate the use of mobile devices for their employees, we will see an increase in usage. Technology in turn is now being required to be available on all types of devices – mobile friendly and adjustable to screen size. We are also seeing the need for mobile tools that can run off-line and have the capability to sync up with systems when a connection is available. This is becoming a priority for organizations that have remote locations, such as oil fields, or construction sites.
As we see the importance of procurement data grow, the need for the most up-to-date information will become more important reinforcing the need for on-the-go mobility in the workplace. Find out more about Puridiom Mobile.
All panelists were in agreement that the day of the manual spreadsheet to manage procurement is disappearing and those that are still using this method will be left behind. Automation is the answer for procurement departments and there is plenty of data and research to back this up (Gartner, Forrester, etc.) Automated procurement processes and implementing best practices will streamline procurement operations, increase efficiencies, decrease inaccuracies, provide visibility and gain cost control of an organization.
The bigger problem for organizations today is not deciding to automate, it is deciding how to automate and with what tools. Panelists agree that a well-thought out plan and good communication with all involved in the procurement process and any branches of that process is mandatory.
Corporate Buying Experience
Another aspect of procurement that is changing is the actual buying experience. As we, as consumers, buy more and more online, we have become accustomed to the user-friendly “amazon-like” experience. This experience is translating directly into the business environment. Buyers in the corporate world are demanding easy interactions with the buying tools and a new “consumerism” is emerging. Technology is adapting by bringing shopping cart experiences to the corporate buyer and allowing social media input and other third-party data feeds to influence the buying decision.
Another way buying behavior is changing is the emergence of “project-based” procurements, in which buyers are collaborating with suppliers, and sourcing to buy for a particular project, rather than buying “one-offs.” The type of purchasing is leading to better controlling of costs and better supplier relationships.
As all panelists have agreed, and we hope you have also, the need for automation of procurement to gain visibility and control of cost for an organization is today and in the future, a necessity. But for many organizations it is difficult to get the C-level buy-in necessary to get the tools needed for this type of transformation project. Panelists agreed that corporate management must be presented a cost-savings plan that includes the viewpoints of all offices of the C-level and how they and the organization as a whole can benefit. Communication to all involved in the process is vital to the success of this type of project. Choose a technology that will meet the needs of your organization today and in the future, and that can help implement best practices, as well.
The Changing World of Procurement webinar was broadcast on September 10, 2014. View now on-demand.