Procurement tech trends of the year

posted by Mark O’Shea
28 April 2017

Efficiency gains remain the unifying thread across the various trends propelling procurement forward in 2017, as technology continues to drive improvements in processes, data, insight and, as all technology ultimately does, savings.

The cloud

We’ve been talking about the ‘cloud’ for a decade, and of course more organisational procurement will continue to head in this direction in 2017. The ease of buying, selling and finding the right suppliers across a full array of business services and goods via the cloud is a natural expectation for the younger generation of professionals moving into budget management roles. 

Leading to a quickening of pace here is the number of companies now looking to ditch clunky, in-house systems and replace with an accessible cloud-only solution, to avoid being lumbered with rapidly superseded systems.

Online marketplaces

For larger enterprises seeking to achieve greater efficiencies and identify hidden cost savings across wider areas of their business, particularly within indirect spend, online platforms will continue to grow in popularity. Geographical limitations will recede, as more companies decide to access global pools of potential suppliers for business services and goods.

The sophistication and accessibility of online procurement marketplaces will also mean employees in organisations of all sizes won’t have to waste time sourcing niche suppliers. Instead, online platforms will streamline their purchasing capabilities, helping them get faster access to high quality suppliers while also ensuring in-house compliance.

Data

Many companies are strong at spend analysis, yet this only provides a ‘rear-view mirror’ aspect of spend management. Even this task is fraught with difficulties. With no standard for defining what goes into each spend category, and no common standardisation around service categories. Once you start to look at the detail across budgets, it can be hard to really understand levels of spend and whether best value is being achieved.

Looking ahead, companies need to improve their view on future spend. A higher expectation of data insights, particularly identifying pricing and demand trends in the wider market, as well as across your own organisation, will become the norm as procurement is increasingly carried out online, across both business services and goods.

Artificial intelligence

Our trust in artificial intelligence will continue to grow in 2017 as we adopt more consumer buying behaviours in the workplace.

From areas of expertise, location, size and the credit score requirements of every potential supplier to clarity on each project deliverable, organisations are already using platforms and being supported by AI to widen their search, speed up their processes and avoid the risk of human bias, error and fraud.

Mobile

We will continue to see the adoption of ‘lighter’ client side mobile apps. All those micro-services and human interactions that slow things down, like raising purchase orders, approvals and checks on delivery times especially for the procurement of goods, are now available via mobile channels.

Apps also help with measurement. Is shouting at the supplier for late delivery always fair or is the client’s own process impacting? Business goods are on tight timelines and data from Apps will improve our measurement of each step on the procurement journey.

Summary

Forget virtual reality, the internet of things and wearables, 2017 will be a year of relentless focus on cost reduction, driven by strategic decisions, the adoption of appropriate technology and its implications for efficiencies and savings achieved, but also in terms of teams, talent and the changing roles of procurement specialists.

Effective spend optimisation should always be about taking the strategic view, evaluating the different sourcing options and, once decisions are made, ensuring compliance within organisations by supporting teams to embrace the changes and benefits that technology can bring to successful procurement.

☛ Mark O’Shea is chief technology officer at blur Group

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