Procurement is a critical component of supply chain management and is becoming increasingly important as businesses look to optimise their operations and stay competitive in today’s fast-paced world. However, while an important function, it can also be one of the most time-consuming and complex aspects of the business.
From identifying the right suppliers and products to negotiating prices and managing contracts, there are many steps involved in the procurement process. One of the keyways to achieve this is by using intelligent procurement processes. Here are some statistics on the value of intelligent procurement processes:
- Companies that implement intelligent procurement processes experience a 12% reduction in costs.
- A survey by Deloitte found that 70% of organisations that have implemented intelligent procurement processes report significant improvements in efficiency and cost savings.
- Gartner found that intelligent procurement processes can help organizations to reduce the risk of supply chain disruptions by up to 50%.
What is an Intelligent Procurement Process?
An intelligent procurement process is one that is designed to be as efficient and effective as possible. This means using technology and data to automate and streamline the procurement process and make better decisions about suppliers and products. Intelligent procurement processes are designed to help organisations improve efficiency, reduce costs, and minimise risk.
There are several key features of an intelligent procurement process, including:
- Automation: Automating as many steps as possible in the procurement process can save time and reduce errors. For example, automating the purchase order process can help ensure that all the necessary information is included and that orders are placed in a timely manner.
- Data analytics: Using data analytics to analyse procurement data can help identify patterns and trends to make better decisions about suppliers and products. For example, analysing data on supplier performance can help identify the best suppliers to work with.
- Collaboration: Collaborating with other departments and stakeholders (both internally and externally) can help ensure that the procurement process is aligned with the overall goals of the business.
How to Implement Intelligent Procurement Processes
Implementing intelligent procurement processes can seem daunting, but it does not have to be. Procurement transformation consultants typically go over the following areas as part of an organisation’s procurement transformation:
- Assess current procurement set-up: Start by understanding how your current procurement processes work and identify areas where they can be improved.
- Identify the right technology: There are many technologies available that can help automate and streamline the procurement process. Identify the ones that will work best for your business. Intelligent solutions like SAP Ariba embed cognitive technologies to aid with spend analysis, supplier risk management, contract intelligence, sourcing intelligence and other application. The below image provides an overview of use cases for procurement technology.
- Analyse your data: Start analysing your procurement data to identify patterns and trends to make better decisions about suppliers and products.
- Collaborate with other departments and stakeholders: Work with other departments and stakeholders to ensure that the procurement process is aligned with the overall goals of the business.
- Continuously monitor and improve: Continuously monitor your intelligent procurement process and make adjustments as needed.
While effective procurement operations cannot be achieved in a day, consistency and commitment to change through new ways of working can lead to cost savings, increased efficiency, and improved decision-making for businesses. By utilising automation, data analytics, and collaboration with various departments and stakeholders, companies can streamline their procurement process to achieve better results. Intelligent procurement is the future and a crucial step to achieving optimal performance and a significant return on investment for businesses.
If you or your organisation are thinking of transforming the procurement function of your business, we believe a solid business case provides the foundation to success. With a variety of services to assist companies at any stage of their journey, get in touch with us today.
