Transforming the procurement function is specialist task, with specialist tools
Several elements are changing procurement today, and as you might expect (especially in these pages), almost all of those changes are digital. The range of transformative technologies is extensive, and vendors are clamoring to be heard over one another to extol their offering’s virtues – so which way should Procurement Directors turn?
Clearly, procurement professionals at the heads of large departments may have third-party consultative help, and one would hope that this external input is specialized enough to provide some valuable pointers. Like many digital transformation platforms, general business consultants tend to take a broad brush approach, and may not possess the specialist knowledge required of the procurement sector.
Here at Tech Wire Asia, we hope to uncover some of today’s key suppliers of digital procurement platforms that can have a significant impact on your business. But first, let’s consider some factors that will decide your choices.
It’s the Interface, stupid!
The success or otherwise of any transformative technology in procurement is still dictated by human operators (although some companies are leveraging AI and RPA, making human input less important; see below). Usability studies and analysis is an area that often comes as an afterthought to teams of developers creating new business platforms, but the bottom line is that if the GUI and interface of any system is unpleasant or ineffective, it won’t get used – thus wasting potentially millions of investment dollars.
Today’s employees demand consumer-level usability, and that means accepted norms of interface and a vocabulary of icons, gestures, and cues that are immediately assimilated, or at least, learned quickly. Mobile use is now considered as “a standard,” and any solution that doesn’t function well on any operator’s mobile can be written out of consideration.
Open systems, integration, and APIs
For systems integrators, there’s also the issue of interface with legacy systems and software. Broad ERP systems may well not have the technical chops to address the complexities of today’s procurement departments, but they do represent a significant investment, and so any procurement system needs to be integrated into the larger workflows: and there, the ERP is often king.
Integration goes two ways, too; suppliers, logistics partners, and supply chain elements all need access to some kind of interface to the procurement platform. That typically ranges from a simple web interface to allow new suppliers to register, up to full tender application frameworks and low-level integration of granular supply chain data from myriad third-parties (and their IT systems).
A unified platform that gives users full oversight should be the result, capable of pulling together all elements of procurement processes, but also relevant information from other departments (perhaps via the ERP or integrated legacy stack), such as accounts payable, the finance function, and supply chain data.
Big data crunch time
All this information pulled into a useful form establish what are mostly data silos, normalized and processed, and now possesses the potential for so much more. “Big data,” once the sole purvey of researchers and academics, now exists in even the most modest enterprise, and today’s procurement platforms can use the information to create transformative processes and digital disruption.
Analyzing data to draw out trends, locate pain points and bottlenecks, see wastage and suggest improvements is a first step that any procurement platform can take. The very scale of the data pools need computing muscle, and the specific algorithms available from some of the vendors listed below can help navigate the complex data lakes.
Generational steps forward from Business Intelligence drawn from collated data is artificial intelligence, machine learning, cognitive processing, natural language processing and other technology offerings of the ilk.
While every product under the sun now badges its products as “AI-powered” (and a look beneath the marketing hype is always advisable), procurement’s day-to-day processes are known to be an area where AI (or a variation thereon) can be deployed effectively.
Procurement is, after all, an odd mixture of raw muscle used to process the sometimes thousands of individual transactions, combined with a necessity for strategic, intelligent oversight. That could almost be a dictionary definition of AI (intelligence through massive, iterative processing), and it’s no surprise then, that many new-generation procurement solution providers are leveraging AI in an impactful way.
Here are three suppliers of the most up-to-date digital procurement platforms we would urge procurement professionals to consider as an overall part of their division’s transformation.
Zycus’s standing in terms of Gartner and Forrester is very much head and shoulders above its competition. While its years’ of expertise in AI attracts the more technologically-minded procurement professional to the platform, it’s the everyday practicality and usefulness of the Zycus offering that impresses the regular users of the solution.
In a series of modular builds, the Zycus solution set comes together into an astute, single view that pulls together discrete but inter-related data, including complexities like linking contract compliance to line-level requisitions (for example) but presents it simply, and always in context.
The platform covers off all the procurement essentials, such as such as strategic sourcing, contracting, supplier and PO/invoice management (as you might expect) but also offers exacting digitally disruptive solutions to areas like spend analysis, contract authoring or Procure-to-Pay . The latter leverages the company’s many years’ experience and a host of the latest algorithms (and RPA-style methodology). These automate intelligently much of the repetitious processes of today’s procurement professionals.
The powerful analytic capabilities combine with a seamless integration capability that allows different data silos (such as legacy ERP and databases) to feed into the collated business data in a specialized format, just for procurement purposes. It’s from this normalized information pool that the Zycus engine draws its business insights; again, with the procurement department as its target.
Corda applications are the brainchild of blockchain-in-business specialist, R3. R3’s technology is available as an open source offering under Apache license and a paid-for enterprise variant. It differs from a pure blockchain model as it separates the private, contract or deal-specific information and what R3 calls the “Notary.” That’s the assurance derived from the submission of each element of the deal as it happens over time by a public pool of participants – one example might be all of the Corda platform’s users, for example, or a subset.
In complex organizations where trust at a minute scale is essential (as errors and mistakes multiply and cost companies millions), use of the blockchain may be the way to essentially push out into the public arena (in a secure way), overseeing procurement, payment, and contract-based settlements.
From a procurement industry perspective, R3 is attempting to solve two conundrums with one product, in some ways: how to monetize an open source offering (and being open source is pretty much a prerequisite for any type of more widespread acceptance, given the potential stakes) and how to commercialize blockchain in practical procurement cases.
With Basware’s platform, user buy-in levels are very high: the interface is simple to use and ubiquitous. If a product or service needs sourcing, users can select a category and be funneled down into preferred (and pre-approved) suppliers, with the entire click-to-procure process being so simple it obviates the desire for staff to pick up the phone and make an unofficially-sanctioned order, as can often happen.
Any company using Basware’s procurement platform may uncover a few truths, such as the high amount of retrospective PO creation, for example. The Basware eProcurement solution pairs off approved suppliers, expected invoices and accompanying PO creation. The difference between a disorganized scatter-gun approach to procurement and a controlled (yet entirely flexible & granular) system is notable. In the case of Basware, the software pays for itself in short order with savings made from just one of the procurement categories that the software helps to define.
The overall effect is one of moving the procurement function from a transaction-based series of repetitive processes to one of data-based reporting. With the subsequent savings and staff uptake levels high, it’s a recipe any procurement department will find attractive.
*Some of the companies featured on this editorial are commercial partners of Tech Wire Asia
- How predictive analytics can help you enhance customer experience
- Is it time for cloud service providers to reinvent themselves?
- WeChat isn’t a messaging app, it’s a public utility service
- Why 60+ governments trust VFS Global with visa applicants’ data
- Why is the healthcare sector struggling to adopt IoT?