Procurement Software Trends to Keep Track of in 2021

The year 2020 changed how enterprises view procurement and supply chain management, perhaps forever. Accelerated digital transformation and adoption of latest technology and data analytics in procurement became top priority as enterprises looked for ways to survive and thrive in a post-pandemic world.

In 2021 too, the priorities are expected to remain the same: make procurement agile and future-proof through cutting-edge software solutions. Here are some technology trends likely to influence the choice of procurement software platforms in 2021 and beyond:

7 Key Trends for Procurement Software in 2021

1. The wide use of artificial intelligence in procurement is creating new opportunities to enhance efficiency and reduce costs.

From demand planning to spend and contract analytics to accounts payable automation, AI is now unifying and transforming the entire procure-to-pay process. Procurement software platforms now use machine learning algorithms to quickly organize unstructured spend, cost, contract and supplier data.

AI is also being enabled to reduce procurement workload by deploying chatbots to answer a wide range of supplier queries. Chatbots can be programed to handle low-value transactions, send and chase orders, and track invoices and payments. They can also help find — and shortlist— suppliers and monitor their performance based on key performance indicators.

2. A transition from monolithic to microservices architecture is allowing procurement to focus more on strategic tasks and deliver more value for the business.

With microservices, developers can build and improve features and need not worry about complex integrations and interdependencies. Developers can also easily tap into whichever microservice suits their specific needs.

3. Shifting from an on-premise model to the cloud has many potential benefits for procurement teams. But it is vital to choose a cloud-native solution instead of one that is merely a cloud-based solution.

A cloud-native model enables a business to unify a wide range of relevant applications and data under a single platform. Such a model enhances business resiliency, agility and productivity while reducing costs and lowering risk.

4. With crowdsourcing, enterprises can access new supply channels.

A relatively new concept in sourcing, crowdsourcing involves signing up a digital platform provider to achieve specific outcomes and deliverables. Members of the crowd then work to realize these outcomes.

By capturing diverse inputs from crowd members, crowdsourcing helps businesses access a previously untapped pool of suppliers with fresh new ideas and insights. Due to its several benefits, such as cost savings, crowdsourcing is likely to emerge as a preferred choice of sourcing in the future.

5. Robotic Process Automation (RPA) is increasingly being adopted in procurement.

A software that recognizes and learns patterns and performs rule-based tasks, RPA in procurement can be leveraged to automate repetitive manual and monotonous tasks in procure-to-pay processes. The result is higher efficiency, reduced costs and improved accuracy and compliance.

6. Enterprises are leveraging advanced analytical capabilities to enhance savings on spend.

Procurement teams deal with a lot of data on an everyday basis. What is required to convert this data into actionable insights is a platform that can streamline end-to-end procurement processes and unify data across departments. With the help of data analytics, procurement can also engage in ‘What if’ planning to determine likely scenarios and think of ways to mitigate their impact on the business.

7. Blockchain is redefining digital transactions and source-to-pay process efficiency.

With a cryptologic data structure, blockchain in procurement helps create digital transaction ledgers that can verify and validate P2P transactions. It can simplify purchase order management, order validation and approval, invoice processing and multi-way matching. Plus, blockchain can help create smart contracts that automatically implement terms of agreements and release payment to the appropriate party.

The bottom line

To avoid supply-related disruptions, mitigate risks and future-proof operations, procurement needs to leverage advanced technologies and analytical tools. This would not only help automate routine tasks and increase process efficiency, it would also identify new avenues of cost savings and value addition.