Predictive Procurement Orchestration: Debunking Myths and Misconceptions

Predictive procurement orchestration has fast emerged as a game-changing approach to managing complex purchasing processes. An advanced approach that combines AI, ML, and data analytics, it not only streamlines procurement processes but also identifies future needs, potential issues before they arise, and accordingly provides data-driven insights.

What is Predictive Procurement Orchestration?

Procurement has so far functioned like a control tower, with a single point of decision-making. Many users, as well as teams such as finance and legal, still find procurement systems cumbersome to navigate. Procurement orchestration dismantles this single-point structure, providing users with their own control tower for unprecedented visibility. These individual control towers are connected with each other and work together seamlessly to democratize insights and decision-making. Now, what predictive procurement orchestration does is that it adds a layer of predictive intelligence to the entire procurement lifecycle.

But any cutting-edge technology comes with its own set of misconceptions and myths. Let’s take a quick look at some of the common myths around predictive procurement orchestration, so that you can gain some clarity if you are in two minds about implementation.

Myth 1: Predictive Procurement Orchestration is Just a Rebranding of Basic Procurement Automation Tools

Predictive procurement orchestration includes automation, but it goes far beyond the typical rule-based systems. These advanced predictive systems use advanced AI and ML algorithms to analyze historical data, market trends, and several key factors in order to predict future needs, potential supply chain disruptions. Predictive intelligence can suggest most favorable sourcing strategies for a given scenario.

Myth 2: Predictive Procurement Orchestration Requires Complete Overhaul of Existing Systems and Starting from Scratch

From the very start, predictive procurement orchestration solutions are designed with integration in mind. They are designed to work seamlessly alongside and enhance existing ERP or legacy systems, spend management tools , as well as other procurement software. The key is in the orchestration layer, which acts as an intelligent overlay, connecting different systems and adding predictive capabilities. This approach enables organizations to leverage their existing investments while progressively introducing predictive elements.

Myth 3: Predictive Procurement Orchestration is for Large Corporations with Big Data

While it's true that more data can lead to more accurate predictions, predictive procurement orchestration can be beneficial for businesses of all sizes — yes, even the small-sized businesses. Modern AI and ML algorithms are super-efficient at working with smaller datasets, and many predictive procurement solutions come with pre-trained models that organizations can fine-tune with their own data. Furthermore, these systems can often incorporate external data sources to enhance their predictive capabilities, which levels the playing field for smaller organizations. Most of the systems are now essentially cloud-based solutions, and this has made advanced predictive technologies more accessible and scalable for small to medium-sized companies.

Myth 4: Predictive Procurement Orchestration Will Make Procurement People Obsolete

Automating all decision-making processes does not mean employees will go obsolete. It’s all about augmenting the procurement process so that human judgment can be better applied to strategic decision-making, relationship management, and handling complex negotiations, leaving repetitive and data crunching tasks to automation. This will lead to the role of procurement professionals evolving more toward interpreting AI-generated insights, and accordingly crafting strategies and managing exceptions.

Myth 5: Cost Saving is the Primary Goal of Predictive Procurement Orchestration

While it’s natural for business leaders to think it’s all about cost savings and increasing profit margins, the strategic advantages that predictive systems bring to the table far outweigh dollar value addition. Organizations can actually go from being reactive to being proactive.

So, apart from cost savings, some of the key benefits include:

• Improved supply chain resilience through early detection of potential disruptions
• Enhanced innovation by identifying emerging market trends and technologies
• Enhanced supplier relationship management by predicting performance issues
• Improved compliance by predicting potential regulatory issues
• Increased sustainability by forecasting the environmental impact of procurement decisions
• A streamlined intake system for complete control and visibility over requests, eliminating frustration and delays

Myth 6: Time-Consuming and Complex Implementation

Advanced solutions are designed with ease of implementation. That’s one of the key criteria. Many providers offer phased implementation approaches, enabling companies to start with key areas and gradually expand. Furthermore, advances in no-code and low-code platforms have made it easier to customize and integrate these solutions without extensive IT resources.

Conclusion: Future Trends in Procurement Orchestration

Procurement orchestration is changing the way procurement operates. Its evolution will understandably be modeled by the emerging and future trends, some of which include:

• Increasing focus on user experience and support of user decision making

• Supplier collaboration network

• Centralized data management

• Balance between cost, risk, sustainability, and innovation — so that multi-dimensional aspect is managed

These procurement future trends put the focus on constant evolution of procurement orchestration — driven by technological advancements, data-driven insights, and the need for greater efficiency, transparency, and sustainability in procurement processes.

Learn how GEP’s low-code procurement orchestration engine can orchestrate your procurement process end-to-end.