Author: Michael Pyliotis, Vice President – Asia Pacific, Basware
For procurement professionals, 2018 has come with a tremendous amount of change. From the enforcement of GDPR across the globe, the growing call for sustainable and ethical sourcing, to the constant and ever-changing threats of cybercrime – the procurement landscape is changing rapidly. Despite this, there are a number of constants for procurement professionals which sees them continuing to be focused on saving money, improving supplier relationships and getting more out of their systems.
The role of procurement professionals is becoming more strategic, increasingly focused on gaining deeper insights into spending, to drive better decision making from the top down. As such, there has been a trend towards finance and procurement alignment, improving procurement effectiveness, and attracting new hires in a digital world – all cited as critical to future proofing the role of the procurement officer.
With that in mind, three key trends are dominating the procurement space in 2018 and beyond:
- Reducing wasteful spending by aligning finance and procurement
Top of mind for any business is, always, saving money. So how do best-in-class organisations do it? The top answer is a combination of people, processes and technology. And, increasingly this comes from aligning finance and procurement. According to a recent report from Forrester, there are five key benefits of better alignment between finance and procurement:
- Spend Optimisation – allowing more spend to be directed to preferred suppliers for better tier pricing and compliance.
- Accounts Payable productivity gains – meaning that as the proportion of e-invoices goes up, automatic matching results in fewer mistakes, and time spent dealing with inbound supplier inquiries.
- Early-Pay Discounts – enabling organisations with decreased invoice cycle times thanks to automation and resulting in the potential for early payment discounts from the supplier
- End-User Productivity Gains – thanks to automated matching and automated rules which streamline the invoice handling process.
- Maintenance Cost Savings – as a result of retiring old, legacy solutions.
2. How to improve procurement effectiveness
Firstly, procurement professionals need to roll-out a modern e-procurement solution that addresses their purchasing, but also their analytics needs. Creating a purchasing process that is the easiest, fastest and most affordable way for business partners (including internal customers) to do their jobs means that procurement becomes a better business partner.
Another way is to improve workflows. If approvers only see the items on a request that pertain to them, it’s quick and easy for them to sign-off on the items, and for purchases to be made. It makes life much easier for end users. There’s also the element of supplier risk, which can be reduced using modern solutions.
Finally, leveraging data is critical to procurement effectiveness. With a good cloud-based procure-to-pay solution it’s possible to leverage the wealth of data available to pinpoint issues like supplier risk early on, and better manage supplier data to prevent fraud. With the right data flowing in, from both direct and indirect spending, everyone in procurement can do what they do best, including: consolidating spend, rationalising the supply base, leveraging volume buying, negotiating better contracts, sourcing strategic suppliers, and more.
3. Making procurement attractive to new hires
According to The Deloitte Global Chief Procurement Officer Survey 2017, 87 per cent of senior procurement professionals agree that talent is the single greatest factor in driving procurement performance. But the truth is, procurement is more than policing the organisation and saving company money. It’s about building relationships with internal stakeholders and external suppliers, drawing strategic insights from data to help others and using unique talent to solve problems. Key to success is to create a digital culture, leveraging technology that allows organisations to automate, effectively. Then, organisations need to invest in employee development, driving individuals to know how to capture 100 per cent of financial data, whilst building strategic partnerships (both internally and externally) that can take the business to the next level.
Procurement professionals have the power to be the enablers of action, change and collaboration within their organisations. However, in order to be successful, they must understand the strategic role they play in driving change. But it’s not all on them. Organisations who desire their procurement teams to generate data driven insights and pursue strategic decision making must have the right tools, technologies, processes, and people, in place to enable them.
Basware is the global leader in providing networked source-to-pay solutions, e-invoicing and innovative financing services. Find out more at www.basware.com.