The nature of procurement is changing. Increasingly, business leaders are recognising the potential for procurement to be more than a dated back office function. Procurement functions are being recognised for their potential to deliver resilience and strategic wins for the business.
“Supply chain disruptions have made the business landscape far more complex and risky in the last few years,” observes Robert Stapleton, partner and Business Outsourcing Services lead for ISG. “Companies need an effective procurement system to navigate these changes.”
However, according to a new report by Information Services Group (ISG), the evolution of procurement into a more strategic capability is changing the ways that chief procurement officers (CPOs) and other procurement leaders think about software. Increasingly, the ISG found, procurement leaders are “seeking platforms that enhance procurement efficiency, adaptability and data-driven insights.”
Procurement software needs are evolving
According to Stapleton, procurement teams need more capable management platforms than have so far been provided. A more complex procurement function demands a “solid, holistic procurement software platform,” he explains.
Procurement teams need to find ways to make more strategic decisions in increasingly challenging conditions, the ISG found.
Ongoing economic uncertainty is driving enterprises to prioritise cost containment across the entire organisation. As a result, features like spend consolidation, automated negotiation tools and the ability to optimise supplier performance are increasingly prized by CPOs looking to invest in digital transformation. Companies are also reportedly prioritising tools that help streamline workflows, reduce administrative overhead and demonstrably deliver a quick return on investment.
The increasing complexity of procurement processes, combined with growing volumes of procurement data are creating more demand for automation. According to the ISG, software that automates repetitive tasks is particularly sought after. Automation can reduce the chance of human error. It can also give procurement experts more time to focus on strategic initiatives, the report finds.
Naturally, interest in the potential of artificial intelligence (AI) is widespread in the procurement sector. “The next logical step is autonomic decision-making by procurement software itself, especially given the shortage of skilled labour in this field,” said Jan Erik Aase, partner and global leader, ISG Provider Lens Research. “This could be the greatest disruptor that emerges from AI.”
