Is your Procurement Management Process future-ready?
Table of Contents
What is the best way to make your procurement process management world-class?
Have a customer-centric procurement strategy?
Weaving in value-added services?
Taking the data-driven route?
Digital transformation?
Hiring skilled workers into the procurement team?
Digital transformation is key to top-notch procurement process management. You’d be surprised to know that top procurement companies across the globe are focusing more than ever on digital business transformation. Changing business requirements due to the COVID pandemic is one of the reasons for this shift in focus of the procurement strategy. That said, a digital procurement function enables greater operational efficiency and a higher return on investment.
Critical Functions in Procurement Process Management
Defining strategies for sourcing, requisitioning, purchase, inspection, and reconciliation for optimized organizational spending is what procurement process management is all about. Creating a list of preferred vendors, remaining within the allocated spending budget, and delivering goods and services within deadlines various functions within procurement process management. The critical functions of procurement management include:- Spend Management – Defining the needs, identifying sources, researching prices and terms, and ensuring that the spending is within budget limits are some of the steps to spend management.
- Operational Support – Arranging/planning order requisitions, placing orders, and confirming delivery on time are some of the steps in operational support.
- Risk Mitigation – contingency planning for unforeseen delays or supply disruptions are step involved in risk mitigation.
A Shift in the Procurement Strategy Due to the COVID-19 Pandemic
If the Global Procurement Management Strategy was to be viewed as a timeline, then “Before COVID” and “After COVID” would be two very important markings on the timeline. Ever since the COVID outbreak, there have been major changes in the Global Economy. The procurement function is being looked up for steadying the ship by most private and public sectors. According to a Deloitte CPO Flash Survey, there is a paradigm shift in the procurement strategy after the COVID-19 disruption. Increasingly complex procurement requirements, altered risks, and disrupted supply chains are the drivers behind this change in procurement strategy. The Flash Survey was conducted on a group of 100 procurement leaders from top procurement companies located in North America. The key insights revealed by the survey are:- Cost management: Top priority was given to cost management to tide over the crisis. 2/3 of the companies intended to pursue cost-reduction strategies.
- Lasting economic crisis: Most of the companies expected the economic slowdown to continue beyond 2021 and extend to the Q2 of 2022.
- Priority to short-term revival strategies: Emphasis on short-term revival strategies was given by 38% of the survey participants.
- Emphasis on technology: Improving supply management capabilities and adopting advanced technologies emerged as two key strategies to tide over the crisis.
- Virtual working: Enabling hassle-free remote working spaces for the team was among the priorities for CPOs.
- Risk management: The pandemic affected businesses in the most unexpected areas. The importance of having a risk management plan within the procurement strategy was greater than ever.
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Making the Procurement Process Future Ready
Is your procurement process management future-ready? Ideally, a company’s procurement strategy must anticipate changing consumer demands, market trends, economic slowdowns, etc. to qualify as “future-ready”. So what are the measures you have in place for a future-ready procurement management system? Manual procurement processes are time-consuming, inaccurate, and tedious. Businesses looking to become future-ready should consider digitization seriously. As per the Research and Markets report, the Global Procurement as a Service market is expected to reach 7.8 million USD by the year 2024. The trend driving the procurement management market is automation. Automation of the procurement process is one of the most effective ways of improving operational efficiency and cutting costs. The increasing demand to improve procurement operations and the need to handle compliance policies are the key market drivers. Digitization is here to stay, Armed with the right autonomous procurement tools, CPOs can focus on strategic initiatives rather than routine, repetitive admin tasks. Automation of the procurement process provides a number of advantages, such as, –- Reducing processing time and cost
- Better visibility into spend
- Strict adherence to compliance policies
- Higher productivity
- More focus on strategic initiatives
- Efficient supply chain management
- Purchase requisition
- Purchase order
- Vendor management
- Invoice approval
- Contract management.
Conclusion
Many businesses are turning to automation for managing and integrating their procurement process management. Cflow is a reliable workflow management software that can be customized to meet your business requirements. Cflow is a no-code Cloud BPM solution that streamlines your business processes quickly and efficiently. Would you like to try our solution? Sign up for a free trial today.What should you do next?
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