Are cloud-based solutions disrupting your procurement strategy?

Yan Jin is a manager, advisory services at EY
posted by Yan Jin
13 April 2016

We are in the midst of an unprecedented disruption to procurement processes and operating models driven by the “consumerised” processes enabled by cloud-based source-to-pay (S2P) solutions.

While many companies historically have leveraged e-procurement, the newest wave of adoption in cloud solutions is improving spend management while delivering a more consumerised procurement process. 

This innovation can deliver significant benefits, including:

  • Greater spend under management, improved savings and higher compliance through a more integrated end-to-end process
  • A more connected network of buyers and sellers collaborating and sharing real-time data
  • Greater options for financial management of the supply chain that can improve working capital and reduce cost and supply risk

As a direct result of this more consumerised and networked experience — more catalogues, more content hosting, more direct access to suppliers, and more alignment with digital and mobile —there are a number of implications about how procurement organisations will deliver value and adapt by 2025 and beyond.

To respond to heightened expectations of the business, procurement needs to work more collaboratively with the right stakeholders to better leverage technology. Procurement needs to clearly define and communicate a road map for supplier enablement and standardised catalogues.

To drive adoption, procurement needs to understand human interaction points with the S2P process more than in the past — the days of customizing the process significantly to fit business specifications are gone, with the focus turning to motivating the business to work within a standard process. This will require a strengthened skill set for change management, both to work both internally with key stakeholders and externally with suppliers.

Procurement also needs to align its roadmap with digital and mobile within the whole organisation. Most business users will ask for mobile approvals, mobile time and expenses, and more hands-off processing that stretches procurement’s legacy approach to technology.

Across all of these new challenges, the procurement of tomorrow needs updated skills and organisational focus around change management, communications, technology, global user interaction and supplier engagement. Lastly, it needs to establish a support model that sustains the value earned through enablement and compliance, which requires more focus on analysing data about process health, supply risk and market trends to identify areas for improvement.

By properly adapting, procurement can drive even more value by 2025 through a greater focus on process adoption and compliance than its legacy of tactical processing. It will need to align senior leadership around realistic timelines and a streamlined approach to achieve this, given the complexity of transforming the end-to-end S2P process. For the organisations that succeed, there will be a significant leap in value offered through their supplier collaborations.

Yan Jin is a manager, advisory services at EY

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