Procurement – driving technology forward since 3000 BC
Businesses have been facing the challenge of procurement since time immemorial.
I mean it, this isn’t an exaggeration.
When the pyramids were being built over four millennia ago, scribes carefully monitored the fulfilment of material orders on papyrus scrolls, representing some of the earliest-known procurement records in history.
Today, entire divisions and fields of inquiry have sprung up to support the procurement needs of even larger and more ambitious projects. Luckily, so have a lot of new technologies that make procuring goods and materials from a global supply chain of vendors much simpler to manage.
However, procurement is undergoing a rapid transformation, thanks to these new agile technologies that are poised to change the way companies do business.
And, as with all things in business, you’ll need to adapt to the times in order to stay afloat. Otherwise, your competition might innovate ahead of you and leave you in the dust.
In this article, we’ll quickly run through everything a procurement officer or supply chain manager needs to know to take advantage of the latest technology available in the industry to maximise efficiency and stay ahead of the curve.
How is technology used in procurement?
Procurement is no stranger to technological innovation. Some of the earliest applications for the first spreadsheet software in the 70s and 80s (Lotus 1-2-3, VisiCalc, and other long-forgotten names) were logistics and procurement management records. The rise of ERP software and early e-procurement software in the 90s was also a boon for enterprise procurement, making it easier than ever to manage your spending, inventory, and supply chain.
Today, the procurement technology landscape has been undergoing a paradigm shift towards “agile” methods. This paradigm shift means allowing companies to be more adaptable and efficient with their procurement processes, as well as more adept at using data about their supplier market and their own procurement needs.
Let’s look at three areas where this new agile methodology is changing the procurement process: data analytics, supplier management, and all-in-one solutions.
Procurement is becoming more data-driven, allowing business leaders to make more strategic decisions about the vendors they chose, the regions they source from, and the way they structure their supply chains. Some of this data includes:
- Historical procurement spending
- Rate of inventory use
- Supplier order resolution
- Order values
From this data, procurement analytics enables businesses to create projections for their future liabilities and identify ways of saving money in procurement processes.
But it also has other powerful strategic uses. In particular, a survey of CPOs by Deloitte has shown that they use these analytics extensively for cost optimisation, process improvement, and management reporting.
At the core of any procurement process is managing relationships with suppliers. In its infancy, procurement technology allowed for little more than cataloguing information about each supplier, as well as their payment history.
Now, in a more mature industry, agile procurement methods have come in to make supply chain management as seamless as possible at every stage, from client briefing and supplier briefing to project management and quotations.
Tools such as Good for Life’s oFlow platform can manage this process in one intuitive interface, providing you with only the information you need, when you need it, to avoid overwhelming the user. Furthermore, they consolidate all communication channels into a central database, with order status updates and news delivered to whoever needs them.
These same tools can also allow businesses to evaluate each supplier based on accurate performance metrics. Fulfilment times, rate of errors, and other information can be used to diagnose problems, identify problematic suppliers, and much more.
It’s not just the clients that benefit from this advanced software. With supplier portals, suppliers are also able to track their own delivery schedules and order history with businesses and prepare for potential shortages in inventory.
Many businesses are still reliant on separate software modules to track different parts of their procurement process.
Such disconnected systems have several disadvantages. For example, the same data might have to be entered multiple times in different platforms, increasing friction. Or multiple records of the same order have to be referenced in each platform to get the big picture of the whole order.
Agile procurement platforms are fast becoming a solution to unify all of these different modules into a single service platform, from quotation to delivery and payment. This means more seamless integration between procurement processes and management software, as well as minimal friction from quotation to shipping.
For example, Good for Life’s oFlow platform integrates RFQ and project management all in one bespoke interface, allowing clients to get visibility on their projects, client briefs, quotations, and more. Procurement officers don’t have to waste time switching from disparate platform to platform, which means more time to focus on making strategic decisions rather than manually managing their procurement process.
The future of procurement technology
The global procurement software market grew to $5.94 billion in 2021 and is expected to continue to grow slowly but steadily until 2024. Several new trends in procurement software are expected to drive this growth further, and you need to adapt to them as early as now if you want to stay ahead of the curve.
Let’s look at three new developments which are changing the future of the procurement industry: cloud services, process automation, and mobile-first technology.
Cloud-based procurement is already a mainstream application for many businesses.
However, a full transition to platform-as-a-service will integrate procurement technology with the entire business cycle. No longer will there be separate modules or applications to govern individual stages of supply chain management—it’ll be a seamless process from start to finish, accessible by any user, and completely on the cloud.
This also means that many companies can leave their on-premises systems and migrate entirely to procurement-as-a-service. In turn, this reduces the spending on maintaining internal technical support and allows for greater data and service redundancy.
With the transition to a fully cloud-based system, procurement platforms are likely to adapt to open standards that have interoperability with multiple systems.
This allows for a great degree of automation, allowing users to actually interact with the procurement system themselves and make orders without having to interface with the central procurement department.
According to Deloitte, in 2015, 42% of CPOs said they were investing in mobile technologies for procurement. With an ever-increasing mobile adoption rate, it’s clear that moving to mobile isn’t merely a passing trend, but the future of business.
The switch to mobile will mean more intuitive interfaces, faster onboarding, and at-a-glance analytics delivery, which will be available for every user.
These procurement platforms can no longer remain opaque or difficult to use; the future of procurement technology is accessible to everyone, wherever they are, whenever they need it.
The agile way forward
Agile technology is not the future of procurement technology—it’s the rapidly-changing present. By adopting current technologies into your existing procurement processes, while preparing for the future by keeping an eye out for bleeding-edge platforms, you’ll be able to improve the way you manage your procurement efforts and lead your company into the future.
You can get started now by working with a sourcing provider that’s already moved to agile methods, like Good for Life. Our bespoke platform connects clients and suppliers in a fully transparent way, with every order, update, and action accessible through one intuitive interface.
We also leverage a global network of suppliers outside the traditional China-centric market and focus on sustainable sourcing to ensure that we promote environmentally friendly, socially mindful practices that align with your values.
Contact us today to save time and money with a procurement process that’s good for business, good for customers, and good for life.