E-Procurement and Analytic: The digital rescues

At the end of 2023, a study showed that 75% of Purchasing and Procurement organizations had not experienced productivity gains since 2021. Hard to believe given the rise of digital technology and the resulting significant price gains. In addition, the infrastructures benefit from the latest technological innovations. This is a particularly troubling observation in view of the stagnation of sales growth among the largest companies in the world!

Procurement: a complex challenge

How to meet this challenge when Supply Chains have become more complex? Technologies that were supposed to make tasks easier have not provided a tangible solution: long implementation cycles, poor compatibility with processes, and reduced interface with existing technologies. The result is 3 major challenges for the Purchasing Department.

1. Expenses are difficult to analyze

How to answer fundamental questions such as: “How many suppliers do I have? or, “What are my expenses by purchase category?” ” This situation is all the more frequent in companies that have to manage several financial systems (ERP), as well as a global presence with significant outsourcing. Expenditure information is scattered across multiple, heterogeneous sources. Mergers and acquisitions also exacerbate these problems.

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An alarming balance sheet: Capturing savings opportunities and defining an appropriate purchasing strategy is an obstacle course! Carrying out a Purchase map takes weeks: you have to clean up the data and understand the various types of expenses!

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2. Spot Buys (known as “Tail Spend”) monopolize procurement' time

Buyers don't have adequate data on the impact of their decisions. They often rely on anecdotal evidence and the recent performance of suppliers without being able to define a real strategy because they must constantly react to immediate problems. However, a procurement strategy is based on holistic information, supported by comprehensive and consistent data.

Only 40% of Purchasing Departments have implemented automated tools to analyze expenses. Even well-equipped businesses cannot be assured of the quality or availability of data. Preparing data is becoming a time-consuming activity for buyers, before making strategic decisions and identifying savings opportunities.

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3. Technology at the service of buyers

After experiencing a boom in the 1990s, technological innovations in the field of e-Procurement were not as widespread as in Sales or Marketing. The user experience remains a constant challenge. For example, the performance of procurement professionals involves improving the ergonomics of tools. Too many procurement managers still rely on Excel.

An opportunity to simplify Purchasing and Procurement

The right technology combined with adaptive processes should make it possible to solve the complexity of procurement. Purchasing Departments now have all the tools to focus on simplifying supply flows.

Improving Purchasing and Procurement performance involves 3 key points:

1. Removing barriers to internal collaboration

Thanks to new technologies, internal collaboration has never been easier. They give the Purchasing Department the opportunity to focus primarily on strategy. For example, the shared messaging of an e-Procurement solution allows internal customers to share quick questions without overloading email boxes. File sharing tools allow buyers to easily publish tenders and share the same level of information across product categories.

The transparency generated by the increased use of these tools helps buyers better understand the needs of internal customers, identify new opportunities, and communicate the added value of their work.

2. Implement an expense mapping solution

Current e-Procurement solutions offer much more advanced functionalities than simple data tables and graphs.

Is the Purchasing Department looking for an expense analysis solution that can extract information from heterogeneous internal and external sources (ERP, Excel and “corporate” databases)?

All he needs to do is standardize this information to make it easier to identify and interpret. Especially if the tools are implemented transparently within existing processes.

Purchase mapping solutions such as Tamr, Rosslyn Analytics, Sourcing-Force.com or Opera Solutions were designed to meet the current requirements of procurement managers who want a quick return on investment.

3. Making key indicators more accessible

A strategic function, procurement must collaborate with Purchasing. But all too often, this only happens when buyers have access to information such as sales performance, supplier contracts, product quality data, or commodity trends.

An e-Purchasing solution such as Sourcing-Force.com allows businesses to quickly extract data from all purchases, to quickly extract dashboards so that buyers can define their strategies. The aim: to facilitate their decision-making over the long term by minimizing the variability of the supply chain.

In summary — The Purchasing Department is facing significant challenges: procurement complexity, difficulty in analyzing expenses, time-consuming secondary tasks (Tail Spend purchases). Current technologies offer numerous opportunities for simplifying and revitalizing Purchasing & Procurement strategies. The internal ownership of simple solutions that are easily implemented is the key to success. Making data accessible and usable in a sustainable way makes it easier for buyers to make decisions!