Procurement Platforms: Insights & Tips for Decision Makers

Introduction

Digital procurement platforms are no longer expensive tools reserved for the world’s largest corporations, with scalable and modular solutions available organizations of all sizes can now leverage digital procurement platforms to achieve substantial operational efficiencies and cost savings, often reflecting the capabilities of industry giants but at a fraction of the cost.

But there are some pitfalls to consider that can prove to be expensive or reputation damaging mistakes, this short article seeks to highlight some key points to consider and offer some tips to steer you towards a successful deployment. If you are looking for a new procurement platform whether for the first time, or to replace an existing one we hope you find this article thought provoking. As ever, if you would like to know more detail or would like to arrange a demo of our partner solutions please don’t hesitate to get in touch.

First Principles: Key Benefits

Procurement Source-to-Pay (S2P) technologies offer several benefits to organizations by streamlining and optimizing the entire procurement process from sourcing to payment. Here are some of the key advantages…

1. Cost Savings, S2P and strategic sourcing tools enable better supplier selection,  negotiation, contract compliance leading to cost reductions.

2. Streamlined Processes: Embedding best practices and automation of repetitive tasks such as sourcing templates, purchase requests,  purchase orders, invoicing, and approvals reduces errors & manual effort and accelerates the procurement cycle.

3. Compliance and Risk Management, S2P solutions ensure adherence to procurement policies and regulatory requirements. Comprehensive supplier evaluations help reduce risk and lead to better business outcomes.

4. Improved Supplier Relationships, Enhanced communication and collaboration tools foster stronger relationships with suppliers.

5. Visibility and Control, Access to real-time procurement data MI/dashboards enables better decision-making and proactive issue resolution. Organizations can also monitor the entire procurement process, from sourcing to payment, ensuring transparency and control.

In summary by implementing Source-to-Pay technologies, organizations can achieve greater efficiency, cost savings, and strategic value from their procurement activities, ultimately contributing to overall business success.

The Opportunity

Procurement teams face the daunting task of managing extensive administrative duties that add minimal value to strategic goals. From drafting requests for proposals to evaluating bids manually, these processes consume valuable time from experienced procurement professionals that could be better spent on more productive tasks like, spend analysis, maximizing competition and negotiating terms to unearth hidden value. These inefficient manual processes have a real cost to the business, from lost opportunities due to poor resource allocation to savings and optimal terms missed through inefficient negotiations.

The Challenge

An issue you will find (particularly with medium and smaller size businesses), is that increasingly often procurement platforms are only available end-to-end, i.e. as a full suite, this usually means you may be pushed into taking some tools that you may not use initially (or ever),which brings additional costs (both license and implementation), delay (longer more complex implementations) and user adoption challenges (overload trying to learn multiple complex modules, and do the day job at the same time).

To counter this CTO’s are looking more to ‘Composability’, the design principle in which various components or modules of a system can be selected and assembled in different combinations to satisfy specific user requirements. Key aspects include interoperability, flexibility & scalability. This paper won’t go into these in detail, but at its heart is modularity.

The benefits of modularity are simple, although not as common as they once were, for example: if you have a perfectly good ERP that manages your Accounts Payable and Payments elements you shouldn’t be forced to pay for/deploy these modules in a full S2P platform. Rather a better approach is to find a modular solution that allows you to grow at a rate that either suits your needs, budget and appetite for change, or to only deploy the modules that fit within your current/legacy solution architecture (in this example perhaps only adopting the Purchase Request, Source to Contract and E-Procurement modules).

Unlocking Potential

A robust S2P platform can streamline sourcing and automate negotiations, enhancing competition and driving compliance and efficiency across business spend. By automating mundane tasks, teams can refocus on core competencies, transforming procurement into a strategic function that not only saves costs but also drives business focus and success.

10 Tips for S2P Deployment

1.  Modular Design: Opt for end-to-end yet modular solutions that allow you to scale and evolve your procurement processes as your business needs change, and fits  or integrates within your current ERP/legacy systems landscape.

2.  User Experience: Prioritize platforms with an intuitive interface for ALL users: buyers, vendors (often forgotten, but there are typically more of them using tour tool than your internal colleagues!), and internal (non-procurement) business users, (requestors, stakeholders, evaluators, auditors etc.). Ease of use is critical to adoption and poor adoption will make the potential benefits unrealisable and damage your reputation.

3.  Configuration vs. Customization: Understand the critical differences between configuration and customization. Most platforms offer configuration, i.e. using inbuilt functionality to adapt to your requirements at a high level, but true customization. i.e. to add/edit code to fit around or replicate your unique business processes is rare, but often very important for unusual company/industry/country mission critical processes.

4.  Integration Flexibility: Consider your integration needs with existing systems like ERP, though if budget or timelines are tight, with some platforms you can consider starting with a standalone mode, you get the majority of the benefits and whilst saving both cost and deployment time.

5.  Hosting: Ensure your provider offers local (i.e. in-country, or on-premise) hosting options, often crucial in the GCC where this is either a regulatory or common business requirement for strategic solutions.

6.  Leveraging AI: Embrace platforms that incorporate machine learning and artificial intelligence to enhance human decision making, such benefits from supplier selection to automated bid analysis are increasingly important tools for busy buyers.

7.  Branding: Don’t underestimate the value of your own branding on your procurement platform. A strong brand identity can enhance ownership and reflect professionalism to both internal and external user communities.

8.  Multi-Language and Currency Support: Essential for organizations operating across borders to ensure seamless, global/regional procurement processes, bear in mind Arabic is often not supported natively by many providers due to the complexities of building interfaces in both right to left and left to right.

9.  Enhanced Negotiation Tools: Use platforms that support dynamic negotiation tools to foster both greater competition and drive improved terms/pricing.

10.Rapid Deployment and Low-Cost Implementation: Choose providers with quick deployment and low-cost implementation to avoid prolonged and costly setup phases.

Conclusion

As Thomas Edison said, “the value of an idea lies in the using of it”, utilizing an S2P

platform effectively can bring additional benefits from economic improvements, to resource allocation, risk avoidance and more but if your company is not fully utilizing digital procurement technologies, it is likely missing out on significant opportunities to solve problems, improve business outcomes and unlock hidden value.

We hope you found these insights & tips for Procurement Platform decision making helpful, if you would like to know more detail or would like to arrange a demo of our partner solutions, please don’t hesitate to get in touch.

Thanks & best regards,

Dan & the TechConnect Middle East Team