The procurement role within organizations has been viewed as a critical but static business layer for many years. Explicitly focusing on minimizing vendor expenses and boosting business spending visibility was where the priority began and ended for procurement departments. Here, acquiring an executive table was challenging for many procurement leaders since the strategic business and continuity planning involvement was limited. Today, however, things have changed.
Modern Disruptors Drive Innovation and Procurement Change
Following the pandemic outset, many firms were left wondering how to exist in an alternate reality of remote labor force, evolving supply chain risks, and scarce resource availability. However, these challenges have forced an exceptional evolution for procurement everywhere.
Now, procurement is being asked by companies to pave a new way for business development and sustainability. By placing procurement as a staple for functional resilience, firms depend on the procurement teams to offer actionable business visibility around supply chain risk, contractual liabilities, and resource continuity.
Moreover, the procurement department was tasked with streamlining partner relationships faster than ever before. Requiring an in-depth understanding of contracts, spending, and payment terms. It includes thinking short-term fixes and aids companies to position themselves for long-term sustainability. Technology has become a necessity to bridge the gap between outdated procurement methods and these new norms.
Using Procurement Technology to Grab Modern Business Opportunities
In order to meet the evolving business demands on procurement departments, companies must start investing in modern technology solutions like cloud-based procurement software to optimize vendor-client relationships. Solutions such as contract lifecycle management are being utilized to boost effectiveness and complete control over business contracts within a company and provide procurement leaders the transparency, they require extracting more value from the present and future partnerships.
There are multiple variances to consider while navigating compliance, governance, transparency, and control across all contracts. A few questions many procurement departments must answer moving forward are:
a) Is there quick access of business contracts?
b) Are payment terms reasonable?
c) Is there enough information from the provider to make informed decisions?
d) Are early payment discounts available?
Such questions require immediate access to those appropriate data points used in storage of various databases or separate vendor portals. Today, procurement professionals can quickly implement an agile procurement solution which digitizes the entire process.
AI-driven technology can be utilized to automate the data mining process, bringing hidden contract language, terms, and other related details to the forefront. These applications are invaluable in procurement’s new reality and will enable it to be positioned as a true leader during any global economic disorder.
Handling Vendor Risks
The ongoing pandemic has put a strain on procurement professionals to understand and manage vendor risk most closely than before. Now sitting at the executives table, these leaders are being tasked with applying governance policies and framework into vendor management processes. This includes more than only a deep understanding of the financial state of suppliers and the vendors of those suppliers as well.
Accessing all areas of vendor risks can be challenging but extremely critical for procurement leaders. More companies are beginning to shift towards integrating a procurement management solution to help optimize the entire procure-to-pay method while keeping teams updated on the changes in vendor risk profiles. Supplier risk management solutions use automated processes and AI-driven bots to provide real-time notifications whenever adverse events affect vendors. It aids them to rank the risk profiles across all other partnerships within the company.
Improved Collaboration and Communication
Everybody has felt the impacts of this pandemic and the associated social distancing measures taken on the collaboration and communication in the workplace. Meaning critical adjustments for procurement leaders on how they should address internal interactions and how they collaborate with the vendors they support. With multiple businesses permanently or temporarily abandoning old communication procedures, companies can now focus on bridging the gap between the new and old ways of collaboration.
Hence, in order to achieve this objective, procurement leaders must depend on modern technology solutions to optimize communications with all vendors within a unified platform. It enhances the relationship for both suppliers and purchasers’ while ensuring complete end-to-end transparency for everyone during the P2P method.
A technology platform facilitates proper collaboration between purchasers and vendors plus also connects communities of procurement leaders together across multiple industries. It enables companies to increase intelligence and share best practices with like-minded leaders and procurement professionals with the ability to benchmark multiple activities and improve success across other companies within the same industry. This community collaboration provides companies and their procurement teams with the best applications available including all details they require to help build a sustainable business future.
To Sum Up
An unprecedented disruption of this pandemic has forced new realizations for businesses where procurement departments are required to position themselves as a leader in business performance and continuity. For procurement professionals everywhere, rather than feeling shackled by economic disruptions, these leaders must seize the opportunities available for change. Ultimately playing a pivotal role in paving the new way of business for now and into the future.