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    Blog Image

    How to Choose the Right Procurement Solution for Your Business

    • Prevailing uncertainty has led businesses to build agile operations and accelerate digital transformation.
    • A unified procurement solution can offer end-to-end functionality, from sourcing and supplier selection to invoice processing and payment.
    • AI-powered procurement solutions can automate many time-consuming tasks and provide actionable insights.

    March 26, 2024 | Procurement Software

    The global business environment continues to reel under uncertain economic conditions.

    Many business functions have had to make sudden changes and alter their strategy to adjust to the economic slowdown and disruption-prone new normal.

    While supply chain pressures have eased relatively in recent times, businesses can’t let their guard down and must stay prepared for potential disruptions.

    They must act now and take steps to build agility and resiliency, especially for procurement and supply chain operations.

    To succeed in this endeavor, they need to accelerate digital procurement transformation.

    Many of these businesses are investing in advanced procurement solutions that can safeguard operations and ensure supply continuity in adverse circumstances.

    How can they choose a procurement solution that meets modern day requirements and is just right for their business?

    At the outset, the procurement solution should integrate with existing systems such as ERPs. This ensures that data is accurately captured, and the software can work seamlessly with the organization’s workflows.

    What other capabilities should the procurement solution have?

    Let’s take a look.

    10 Must-Have Capabilities of Procurement Solutions

    • End-to-End Procurement Functionality:

    The procurement solution should be able to handle the end-to-end source-to-pay life cycle, beginning with sourcing and supplier selection to invoice processing and payment. It should offer a unified solution for different procurement processes and eliminate the need for separate, standalone software, modules or tools for specific functions.

    • AI Powered:

    Rapid developments in artificial intelligence have led businesses to deploy advanced technology and tools across the source-to-pay cycle. AI-powered procurement solutions can automate a lot of transactional, time-consuming tasks and allow the team to focus on strategic, value-adding tasks. Additionally, AI and machine learning algorithms can derive meaning from the huge amount of procurement data, identify patterns and provide intelligent insights for the team to drive efficiency.

    10 Essential Capabilities of Procurement Solutions

    • Cloud-Native Architecture:

    Procurement solutions with a cloud-native architecture are more secure and ensure scalability and accessibility from anywhere. They allow a business to quickly scale, making additional deployments quick and easy. A cloud-native design also optimizes server and data usage, minimizes infrastructure requirements and reduces overall operational costs.

    • Superior User Experience:

    A majority of respondents to a Sourcing Industry Group (SIG) survey said that a better user experience would radically change procurement’s ability to execute and tackle new problems. User experience is key to ensuring that procurement can use the software effectively and efficiently and deliver on the promise of digital transformation. A simple, intuitive interface, for example, can drive strong user adoption and ensure that the business gets the most value from the software.

    • Mobile-Native Design:

    In a world where remote work has become increasingly common, the procurement solution should enable professionals to manage the end-to-end process from wherever they choose to work. It should allow them to source, procure, review and approve orders, all on the go. It should also allow them to access dashboards and reports on their mobile devices.

    • Spend Management and Analysis:

    The procurement solution should be able to identify organizational spend that can be brought under management and take active control of that spend to realize savings. Comprehensive spend analysis can provide granular, item-level visibility, reduce maverick buying and uncover savings opportunities.

    • Contract Management:

    It is vital for procurement to refer to contractual terms and conditions every now and then and ensure that suppliers comply with them. Otherwise, all the hard work done in negotiating pricing and other contract terms can go to waste. Therefore, the procurement solution must boost contract utilization and turn negotiated discussions into hard savings.

    • Supplier Performance Management:

    Regular monitoring of supplier performance is a key responsibility for procurement. The right procurement solution should enable the team to build a program of supplier performance measurement, feedback and action plans. Additionally, it should boost collaboration and allow suppliers to work closely with internal teams and stakeholders.

    • Master Data Management:

    Access to updated and accurate supplier master data and item master data is critical to making informed sourcing and procurement decisions. The procurement solution should have comprehensive master data management capabilities, including data collection, normalization, error detection and correction, consolidation, data storage and distribution. This will ensure that the team gets one version of supplier and item master data for all procurement functions — planning, sourcing, contracting, managing and purchasing.

    • Accounts Payable (AP) Automation:

    Manual invoice processing and approval leads to payment delays and frustrates suppliers. It is also prone to human error. The procurement solution should streamline the invoicing and payment process, thereby slashing invoice processing costs and cycle times. With intelligent workflows, it can digitally route invoices to concerned stakeholders for review and approval.

    In addition to the above capabilities, advanced procurement solutions can also help in third-party risk management. They can integrate seamlessly into procurement processes to enable proactive risk assessment and mitigation.

    Additionally, they can identify and categorize risks associated with different vendors, such as data privacy concerns, cybersecurity vulnerabilities, operational risks, compliance issues and geopolitical risks. Risk-based segmentation allows procurement to prioritize and allocate resources to effectively manage vendors based on their risk profiles.

    Learn more about GEP’s unified, source-to-pay procurement software.

     

    Tags: Procurement solution

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