What is the Role of Technology in Procurement Best Practices?
A growing world translates into innovation, advancement, and evolution of industry, technology, economies, and demand across markets. The consequent growth that has arisen from rapid changes within the market, evolution of technology, and incorporate of digitization in industry is a direct contributor to further advancement, competitive innovation, and a rising need for strategic ability. The inevitable and growing role of procurement and sourcing has led to a comprehensive and inter-connected incorporation of technology in production, procurement, distribution, and other supply chain levels. The role of technology across facets of industries has become an increasingly interesting debate, and companies often fail to realize the importance of its influence on procurement best practices. To achieve and maintain success in a competitive market, companies must always stay ahead of the curve, leverage robust strategies, understand procurement market intelligence, overcome challenging industry developments, and utilize unprecedented procurement best practices. Technology supports and enables these processes, making it significantly easier for companies to gain a competitive edge, develop novel strategies, create a resilient supply chain, and avoid unexpected challenges or risks.
What are 5 Key Procurement Best Practices Supported by Technology?
Cross-Function Knowledge: In a complex and multi-tiered supply chain, maintain knowledge and data analytics of limited or sectors along the chain can lead to misinformed decision-making, inaccurate judgement, unnecessary spend, and other avoidable complications. As companies have grown, operations have expanded, and processes have increased, stakeholders, CPOs, and supply chain managers have been increasingly encouraged to leverage data from smart factories, digitized systems, and organization-wide networks to improve decision-making. Among the most crucial procurement best practices, this process significantly minimizes error, and leverages technology to simplify operations.
Optimized Communication: When making decisions, entering contracts, procuring new products or services, and producing offerings, companies require clear, concise, and well-supported communication systems. These systems enable transparency, minimize challenges, encourage collaboration, and help mitigate various unnecessary tasks or complications through clarity and transparency. Technology helps companies develop organization-wide communication systems, leverage networks that provide data to all departments, managers, and stakeholders, and minimize the possibility of mistakes or shortcomings due to insufficient or inaccurate data by enabling an exchange of knowledge and relevant information.
Inter-Departmental Collaboration: Procurement best practices aim at creating a more efficient, reliable, and sustainable system that reduces unnecessary costs, minimizes risks, and enables robust strategic, structural, and operational collaboration between departments. For cross-function knowledge, and clear communication systems to serve a reliable purpose, it is crucial for companies to encourage and support inter-departmental collaborations with technology. Regular meetings, keeping various teams updated on major or impactful changes, and opening decision-making or ideation to multiple perspectives can significantly transform the way companies approach challenges, adapt to changes, and ensure sustainable success.
Minimize Risk: All industries and markets are riddled with significant, continuous, and operationally challenging risks which may cause monetary losses, customer attrition, loss of market share, and an overall decline in performance. Identifying, assessing, and managing market risks is crucial to maintaining success, and minimizing the impact of changing dynamics or rapid industry developments. Technology helps companies identify market fluctuations and changes, internal shortcomings, and impactful inefficiencies with data analytics and procurement market intelligence. Access to this data can help CPOs and stakeholders significantly minimize the risks and challenges presented by the market. Minimizing risks is one of the most crucial procurement best practices, and failure to deliver can lead to substantial losses for any company.
Improved Relationships: Maintaining robust business relationships and partnerships is known to significantly improve strategic ability, performance, profitability, and efficiency. This information has led to a significant surge in supplier relationships management and caused companies to increase focus on all major changes that may affect the same. Leveraging technology and data can help companies track performance, minimize spend, improve negotiations, understand the market, exchange accurate information, and develop reliable communication between both parties. As companies grow, the role of their partners increases substantially, and with the help of accurate, automated, and filtered data, these relationships can be optimized, improved, and supported.
The dramatically rising tide of digitization, smart factories, IIoT, and automation since the advent of the COVID-19 pandemic has led to significant growth, industrial advancements, innovation, and unexpected changes. These changes have impacted various industries, including the rapidly evolving and competitive mining industry. A growing mining company based in the APAC region witnessed a sudden surge in demand due to the growth of the IT & telecom, and electronics industries due to the need for remote work set-ups and online networks. However, the change in demand caused various major challenges for the company, including inability to keep pace, shortcomings within the supply chain, communication gaps, and similar operational issues. To tackle these challenges, the company approached SpendEdge, and sought to leverage our advice regarding procurement best practices and expertise in procurement market intelligence. Our experts worked closely with the company, identified shortcomings within the supply chain, and advised varying investments in technology, operational changes, and data-driven decision-making to enable sustainable and achievable growth as the industry continues to rapidly expand. With the procurement best practices advised, the company gained a significant competitive advantage, capitalized on the growing market, and stayed ahead of the curve with reliable innovation.