‍Driving change

Procurement is increasingly relying on data analytics to get better insight into suppliers, products and market trends, which helps to identify new opportunities and make better data-driven purchasing decisions. Advanced Analytics, including Predictive Analytics and Prescriptive Analytics, can be a powerful tool for procurement functions to automatically analyse trends and patterns in large amounts of data from disparate sources, and ultimately suggest actions to users. It delivers deeper insights, making sure that you understand exactly what happened in a process (Descriptive Analytics) and why (Diagnostic Analytics), what is going to happen (Predictive Analytics), and what should actually happen (Prescriptive Analytics).

Automating repetitive tasks leaves more time and focus for strategic decision-making and relationship management. Examples of processes that successfully make use of Advanced Analytics include demand forecasting, risk management, supplier risk monitoring, price variances and spend category opportunity assessment.

Artificial Intelligence (AI) and Machine Learning (ML) are not new in Source to Pay processes, and the deployment of these technologies has now really gained momentum. We see successful applications in contract management, in sourcing processes, in negotiations with suppliers, and in invoice processing. In addition, virtual assistants and chatbots can be deployed to guide employees through the ordering process, recommend the best options, collect data, and help suppliers with frequently asked questions.

With the advent of AI and ML, many procurement professionals will see their jobs change in the coming years. Repetitive tasks will be taken over by machines/software, allowing procurement to focus on the more strategic tasks that add value to the process. When implementing AI within the procurement function, it is important to have or acquire the necessary knowledge and skills that will enable your organisation to properly appreciate the opportunities and limitations of this technology.

Blockchain is increasingly being used in procurement to share information between multiple parties and conduct transactions without intermediaries. Using this technology, organisations can track the entire lifecycle of a product – from procurement to delivery – in real time, allowing all parties to see the same information at the same time. This helps organisations increase transparency and traceability, reduce costs and improve supply chain efficiency.

Blockchain also makes processes more secure and reliable, and it helps reduce fraud. Implementing blockchain requires careful planning and cooperation with all stakeholders, especially since it may also involve changes to existing processes and systems.

Corporate Social Responsibility (CSR) and sustainability are not just hypes, but essential aspects of procurement today. They reflect the way an organisation deals with its environmental and social impact, how it meets ESG criteria, and how it contributes to the wellbeing of society and the planet. CSR and sustainability are always evolving, influenced by changing consumer expectations, regulatory pressures, technological innovations and global challenges.

Supplier sustainability solutions provide a platform that helps, among other things, to get a grip on ESG compliance, evaluate sustainability targets, and improve the sustainability performance of your organisation and supply chain.

By 2028, e-invoicing and the digital reporting of transactional data will become the norm within the European Union. In some European countries, like the Netherlands, e-invoicing is already mandatory for anyone supplying goods or services to the central government. Despite the well-known benefits of e-invoicing, such as faster invoice processing, fewer errors and shorter payment terms, the main reason for many organisations to start using it remains compliance with changing regulations. E-invoicing is often also a starting point for the step-by-step digitisation and automation of the entire Purchase to Pay chain.

E-ordering is the next step towards a fully digital and secure process. By sending the e-order via a secure e-invoicing network (such as Peppol), suppliers can process orders faster and error-free in their order system. The e-order also forms the basis for the e-invoice. More and more software allows the processing of an e-order (xml) and ‘flipping’ it into an e-invoice at the touch of a button.

Robotic Process Automation (RPA) is an umbrella term for new technologies that replace traditional human-computer interactions by automated processes. With clearly mapped instructions, the software can mimic manual and repetitive tasks. RPA performs scripted tasks faster, with fewer errors and at lower cost. The prerequisite is that the tasks are routine, predictable and rule-based. RPA can be deployed on its own or integrated into an existing solution.

RPA can significantly reduce manhours for labour-intensive tasks, such as enriching supplier master data or cleansing invoice data. In addition, RPA software can improve quality and reduce process costs generally. The actual savings potential depends on the level of automation of the systems already in use.

Supplier Information Management technology collects, manages and maintains supplier data by delegating this responsibility to the suppliers themselves, with the aim of significantly reducing the procurement function’s workload. Other benefits include better synchronised supplier master data across applications, faster communication with suppliers, better spend reporting, more accurate and complete risk management analyses, better supplier compliance, and fewer erroneous and incorrect payments.

Tail Spend Management can bring additional savings to your procurement organisation, without requiring additional resources. Active tail spend management is indispensable to gain more control over spending and processes, build a more efficient supplier base, reduce direct and indirect procurement costs, and improve analysis and reporting capabilities.

Modern tail spend management solutions allow employees to decide on small purchases themselves without the need to involve procurement. Following on from this there are solutions that develop ‘smart’ physical or virtual payment cards which allow you to set a target and limit for each user, apply customised approval flows, and track transactions.