May 10 by Steve Feyer

As procurement becomes more strategic and collaborative, many companies are poorly positioned. Consider companies that design their sourcing process on multiple, siloed systems of record, e.g., ERP or PLM systems. These systems are not built to enable engaging, comprehensive buying experiences.

For one, transactional systems of record weren’t designed to support procurement. That means procurement professionals are forced to jump through hoops as they work with a less-than-intuitive system. Plus, they weren’t purpose-built to capture procurement knowledge. As a result, valuable data and insights get lost – and procurement is stuck in frustrating, one-way conversations that are a waste of time.

Combined, these shortcomings make it hard to track answers to three key questions:
What is the status of the procurement request?
Who is working on it?
Who approved it?

Typically, companies try to manage these answers with email, instant messaging, shared docs, and “war rooms.” None of these provide ideal results.

5 Essential Procurement Capabilities

Companies that are evolving their strategic sourcing capabilities should look for a dedicated platform that supports these five must-haves:

1. Digitized: In the name of digital transformation, companies must be able to fully do away with manual or paper-based methods. A transition to digitized buying department enables higher levels of standardization, efficiency and accuracy. The best platforms can easily incorporate paper documents into the procurement process, for example, by using artificial intelligence to read and understand scanned documents.

2. Single data source: All supplier-related data – including scorecards, contract negotiations, and performance results for current and potential suppliers – should live on one platform to serve as the single source of truth. Advanced platforms enable this consolidation of data from multiple sources without messy integration.

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3. Data tracking: Because data powers the procurement process, it’s critical to choose a solution that makes it easy to track all data at any stage of the process. Look for a platform that goes so far as to track metadata, such as contract cycle times and who approved a contract, for example, because there’s value hidden in that type of data.

 

4. Reporting: When handled strategically, buying can be the source of many insights that drive tremendous cost savings and show the path to new business opportunities. The key is to surface and act upon such insights quickly. To that end, a procurement platform should include out-of-the-box analytics and dashboards that empower procurement and eliminate the need to engage a technical specialist or programmer or buy separate analytics software.

5. Mobility: As more business is handled remotely, it’s essential for buying department professionals to access the system from anywhere. The best platforms are mobile-native, with virtually every function as easy to use on a mobile device as from the desktop.

At a time when the buying function is becoming increasingly strategic, it’s essential for organizations to put in a place a foundation that paves the way for effective procurement. That means evolving from legacy systems designed for other purposes to a modern platform purpose-built to enable sourcing excellence.

Learn about the key steps in Contract Management, a critical process for procurement organizations. Download the Ultimate Guide to Contract Management today – available for Microsoft and Salesforce customers.

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