5 Ways Digital Procurement Strategy Benefits Your Business

As a procurement professional, you may have always done a lot of paperwork. Or you may have worked on spreadsheets with a huge volume of unstructured data. 

Checking inventory levels, placing purchase orders, getting approvals and negotiating with suppliers are all part of your daily duties at work. 

Most of your work is manual, time-consuming and prone to error. 

When suppliers send invoices, you have to match them with the original purchase orders and goods receipt. If payments are delayed, you often have to take the blame for taking too much time to validate invoices. You miss out on early payment discounts and, more importantly, hurt some of your key suppliers. 

If you continue to work in this manner, you will not be able to sustain for long. 

You are likely to miss payments, ruin supplier relationships, and lose to competition. In case there is a supply chain bottleneck, all your paperwork and spreadsheets will not make things simpler. These pain points can hinder your ability to deliver value and drive strategic outcomes for your organization. 

Thanks to the evolution of procurement technology, you can overcome these obstacles with ease and build a robust procurement function. By adopting a digital procurement strategy, you can transform these challenges into opportunities for growth and efficiency. 

How Digital Strategy and Solutions Benefit Procurement 

Here are five ways businesses can benefit with a digital procurement strategy: 

1. Get Data Access: 

Digital procurement solutions provide access to previously unavailable data, or bring order to huge, unstructured data sets and provide meaningful insights. This intelligence can help procurement choose the right suppliers, better negotiate with them and make the right sourcing decisions. They can get comprehensive spend visibility, analyze enterprise-wide spend data and identify potential savings opportunities. 

2. Determine ‘Should Cost’: 

By combining internal data with external market data and reports, digital procurement solutions can uncover trends in commodity prices. Procurement and category managers can dynamically compute the should-cost of their volatile commodities and negotiate with suppliers. They can also foresee a change in input prices and its impact on product margins, as well as analyze different scenarios to protect those margins. 

3. Work Closely with Suppliers: 

Advanced digital solutions allow procurement to work in close collaboration with suppliers. They can look at the same data in real time to align supply and demand, use collaboration tools to make quick decisions and make adjustments as and when needed. They can get multi-tier visibility with near- and long-term forecasts to sense any changes in market conditions. 

4. Simplify Supplier Performance Management: 

With an advanced digital solution, procurement can access all data related to supplier performance on a dashboard, including delivery timelines, quality, contract compliance etc. By closely looking at this data, they can determine if the supplier has complied with service agreements. They can also get early warning of performance deviations and engage in operational intervention. 

5. Champion Sustainability: 

With a digital strategy in place, procurement can include sustainability metrics in various supplier-related activities. At the outset, they can use these metrics in sourcing to identify suppliers practicing sustainability initiatives. They can also integrate these metrics with procurement data to evaluate supplier performance and reward suppliers who improve their sustainability performance over time. 

Choosing the Right Digital Procurement Solution 

Procurement teams use discrete systems and tools to manage their source-to-pay operations. These systems often work in silos, hampering fluid exchange between different parts of the process. As a result, there are gaps in sourcing and contracting and between purchasing and payments. 

A unified source-to-pay platform bridges these gaps and provides seamless data, information and workflows in the end-to-end procurement process. By unifying the complete range of procurement software functionality into a single platform, a source-to-pay procurement solution becomes the single global procurement solution for all users. 

A unified procurement solution can handle the full scope of transactions, from sourcing to accounts payable. It thus brings together source-to-contract and procure-to-pay processes under the source-to-pay umbrella. 

Users can access data in real time, derive useful insights and utilize the intelligence to make smart decisions and adjustments. They can always stay one step ahead and work proactively to safeguard business operations.