Procurement is the most recent of the supply chain functions to undergo a strategic evolution. Sourcing is increasingly recognised as a driver of value for the business as a whole with the ability to drive technology adoption and sustainable reform.
Digital transformation is no longer optional in procurement. Technology adoption is a prerequisite to success over time, especially at scale. Demand for procurement technology platforms and solutions is understandably high. As a result, so is the supply.
Procurement platforms abound
The growing importance of technology to the procurement process is driving an explosion of “ technology platforms, data providers, and start-ups,” according to researchers at Capgemini. However, while this bountiful supply of new tools, platforms, and potential partners holds the promise of digital transformation success, the profusion is making it “overwhelming for decisionmakers in and outside procurement,” to make the right selection.
Another report by Forrester found that, while adoption of digital tools in the procurement sector has been widespread and enthusiastic, “many organisations think they are more advanced than they actually are.”
Forrester’s report warns that, when selecting source-to-pay (S2P) procurement tools, many procurement leaders are failing to properly evaluate their needs and the potential of the software itself. This is a potentially serious hurdle for the sector, as choosing the right tools is critical, and failing to do so can badly hinder transformation.
They found that numerous organisations struggle with their technology choices. A staggering 82% of respondents who switched procurement platforms regretted the decision and were considering switching again.
Capgemini notes that, while these S2P platforms are maturing and “offer robust solutions for various businesses,” many organisations are still struggling to realise the value they offer.
Ecosystem onboarding issues
One of the key problems for procurement departments implementing new S2P platforms could lie outside the organisation. According to the Forrester report, the top obstacles leading to changing technologies were supplier onboarding followed closely by user adoption.
The researchers found that an inability to effectively onboard suppliers to a new S2P platform the most common reason for switching software solutions.
“It is no longer acceptable for selfish CPOs to impose expensive and/or unwieldy software on their suppliers or force them to incur fees or agree to vendor terms,” argues the report. It adds that, in order for the digital transformation of procurement to be successful, the process must be inclusive of suppliers. Steps such as onboarding and responding to RFXs in addition to transactional processes such as ordering and invoicing cannot be neglected.
