Latest Trends in the Procurement Software Industry You Should Know About
The procurement industry is facing a wave of trends after the US presidential election and the Brexit referendum. It is important for procurement professionals to update themselves about these trends to take their company forward. They can also use suitable procurement software solutions to boost efficiency and productivity in their business.
The global procurement apps market is expected to top $5.4 billion by the year 2020, up from $5 billion in 2015. Besides using the right software, companies are also looking to cut costs this year. They are analyzing indirect procurement and researching the right aspects to target. Businesses are also focusing on spend insight by evaluating spend data to focus on the most impactful areas.
Demand management has become a key subject in sourcing since future projects are likely to include demand management processes such as minimizing excess quality, lowering overall demand, and controlling waste. Businesses are also looking at transformation in cost structure and are focusing on aspects such as supplier improvement programs, purchasing based on consortiums, and process re-engineering. Sourcing companies will need to make use of modern applications and also hire sourcing executives with good skills in project management. Let’s now take a look at the key trends in the procurement industry that are expected to dominate this year and in the future.
Utilizing Local and Green Sources
The Brexit result and Donald Trump’s vow to take a re-look at international trade pacts have caused uncertainty among overseas suppliers and partners. Because of this uncertainty, companies are looking to reduce overall spending.
The increased use of local supply sources is likely to reduce the dependence on overseas suppliers. Governments are signing international environmental pacts and consumers are making a beeline for green brands. The procurement industry needs to be aware of these trends and spruce up their act with appropriate actions.
Enhanced Supplier Collaboration
Companies are increasingly using spend management solutions that empower employees to use self-service for strategic procurement activities. As a result, less importance is given to routine supplier activities and sourcing professionals are focusing on getting greater value from suppliers.
The manufacturing and retail sectors have a reputation for collaborating with suppliers in order to build innovative solutions but the services industry is lagging behind in this aspect. Procurement needs to get its goals right and act to enable businesses by analyzing supply markets and spend data trends. This sector should focus on delivering recommendations and insights that allow business leaders to make crucial decisions on meeting their financial objectives.
Suppliers are sure to accept this development as they also wish to concentrate on value. Thus, we are likely to see a widespread improvement in supplier-procurer relationship management.
Indirect Procurement is Becoming Important
Indirect procurement teams are finally getting comprehensive data on spend management – including data on integrated travel spend as well as tools to make use of analytics to assist their organization to save money. Company managements welcome this support for decision making based on data that indicates where to reduce indirect expenses.
Procurement needs to bolster its internal positioning in the organization by turning over analysis, responsibility, and tools to the company management. This unit needs to lose its reputation as a policing department and focus on empowering the enterprise with insightful analytics that helps them make smart local decisions.
Continued Technology Development
Organizations are transforming themselves for the better by integrating sourcing, buying, and procurement methods and technology, as well as its interface, into the other business apps they use. Chief procurement officers who have implemented empowering systems have placed the procurement unit at the heart of their organization, helped by insightful business data. Procurement technology is set to improve in the future into a mode that consists of a main container supported by myriad transactional solutions. This development will help companies to control and manage a larger proportion of their indirect spend.
Millennials are Ruling the Roost
Millennials are transforming the procurement landscape and buyers are increasingly using mobile devices for their activities and operations. More millennials are taking over key business positions overtaking baby boomers, and this new generation wishes to work anytime, from anywhere, using multiple channels such as mobile, tablet, and desktop. A good percentage of B2B purchasers utilize a mobile device for their tasks. Plus, they use the internet to research and get more information about their purchases. Therefore, suppliers need to improve their communication strategies with this generation of buyers. Both supplier and buyer as well as the general economy can benefit from this trend. Businesses wishing to hire millennial talent should focus on meeting their expectations by providing the latest apps and technology and the flexibility to use it productively.
Self-Service Tools are Widely Used
Businesses are reinventing themselves by enabling their customers to easily communicate their needs and demands. They are using self-service options which provide the benefits of improving customer satisfaction as well as reducing the costs of order management. A Forrester research report indicates that B2B enterprises can reduce costs related to client service by a whopping 90% by offering a self-service environment for eCommerce.
Cloud Shows its Utility
Apart from full service, cloud is another factor that is important for procurement communication. The secret to success is stronger communication and deeper visibility between suppliers and partners. Cloud-based networks empower supplier-buyer collaboration by streamlining ordering processes and providing a unified view to control and manage global shipping. If you need to make adjustments midway, it is easier now to do it as you have complete visibility on the location of your shipments at any time. Thus, cloud networks are keeping partners and customers happy all through the journey.
These then are the key trends that are expected to dominate the procurement industry in 2017 and beyond. We invite you to share your views and feedback on this article as well as provide information about any other important procurement trends you may have come across.