Scanning the world of procurement thus far into 2019, our verdict is that digital technology continues to dominate change — but that at the same time many businesses are hustling to keep up with it.
One frequently cited survey reports that only about one-third of executives have implemented digital technology in procurement and related services. And yet, more than four-fifths of them say they believe that digital transformation will revolutionize the way they deliver services in five years. Obviously, there is a gap to close.
Nevertheless, the digital technologies themselves continue to race ahead and increasingly “digital” is called the procurement trend. Some organizations are bringing on board cognitive procurement technologies that include AI, robotics, ML, and big data analysis.
The tasks that need to be handled range from routine, repetitive procurement work to providing top decision-makers with the information they need to manage procurement – including ways that maximize its potential for cost control and enhanced profitability.
Here are a few key challenges to business in 2019 that have direct implications for procurement. In a sense, they are not novel challenges, at least as Value Innovation Technologies (VIT) perceives them. Because they, for the most part, are the kinds of problems that VIT helps businesses solve.
Change Continues in 2019
1) The first, of course, is coping with digital transformation itself. The basic step is going from manual to digital, but with a strategy that works not for “most companies,” but for a particular company at a particular time. That highlights the imperative that a provider of a digital system for procurement services begin by understanding a given organization’s vision and long-term objectives as well as its immediate challenges and cost-saving goals
2) No procurement technology, however powerful, is better than the training and commitment of the team that manages it. And surveys indicate that many owners and managers lack confidence that their organization, right now, is up to the challenge. Training and skill development are issues that VIT takes seriously. The crucial first step is to be certain that our fully configurable system is customized for all key tasks of a given company — and that programs are as intuitively usable as possible. Our goal is a long-term partnership with a company that uses our services. So we have a big stake in working with the in-house team responsible for it and helping them to optimize their performance.
3) As procurement systems stretch greater distances for the right supplier at the right price, the relationship with that supplier becomes more critical. It goes beyond price to include the thinking and planning that spells success all along the line. Obviously, companies today operate in a world that demands increasingly effective risk-control. And procurement often is at the front line in terms of that risk. Whether it is political disruption of supply chains or issues of ethics and transparency in sourcing, the key to risk management is a system that keeps a company in constant communication with all suppliers –and with maximum timely information about conditions.
4) As germane as any of these considerations are, and with perhaps the greatest implications for cost saving, is an intensive focus on indirect spending. The wider the supplier base, the more real the hazard that procurement will become so cumbersome that leaks, information of the wrong kind, and mounting paperwork — to name but a few issues — will let indirect spending compromise overall procurement performance. The only procurement system worth the investment will control purchasing decisions across the board. It will ensure that when comparable products and service — including viable substitutions — are purchased, they are at the best price.
Generically, these are the issues that VIT set out to address. VIT listened to its customers talk about the future of driving down costs — and the problems they faced. This keyed the innovation of the eLink™ Gateway e-catalog hosting technology.
The eLink™ Gateway Platform
Its development was driven by the vision and extensive experience of people who are from the buying business. They were buyers and still think like buyers. The eLink™ platform speaks directly to the needs of buying and selling organizations today:
- E-commerce catalogs to connect with all key vendors, at a company’s contract price, in a single shopping session.
- Management of the product and price comparisons required to make the best choices among vendors, including identifying working substitutions.
- A single virtual system that connects processes such as orders, financial parameters, inventory, and procurement into a fully-functioning integrated whole.
The differences that make the difference at VIT are these:
- An award-winning product that controls selection by any employee who is buying, ensuring that the best price is always obtained as long as the product is demonstrably comparable.
- A technology that is flexible and scalable and the only such technology that is fully configurable.
- The VIT commitment to be a trusted advisor and partner.
We stay abreast of a constantly changing universe of procurement technology so that our customers can reap the benefits.
To learn more about our industry-leading software and how it can help your business save money on indirect spend or to schedule a demo, give us a call at 704-296-2987, email us at email@example.com, or visit valueinnovationtech.com.