3 ways procurement can benefit from
Anyone in business has likely seen a familiar term floating itself around: "as a service." Whether it's software, cloud platforms, or even entire industries, the idea of something that used to be a product becoming subscription-oriented is spreading, and could translate to procurement as well. This means that purchasing management may need to transform to suit the issue.
The challenge in fitting this new model can come from reorienting the business philosophy. Along these lines, here are some of the positives that could come from the growing use of service-based practices.
1. Structured service offerings
With the added freedom of the AAS model comes a chance to get more specific about what the business can actually do. A Spend Matters piece recently pointed out the need for procurement companies to measure cost against the value for customers.
"Businesses have the chance to keep clients for longer."
These businesses can ask whether or not there's enough demand to introduce a service tier for a specific feature. As this becomes more common, the industry as a whole could learn which subscription services matter the most to the market, although the source also said that some in procurement don't like being associated with the kind of models that work in the consumer sector. This could be a barrier to further development, but it might not matter if the subscription method brings better results.
2. Consistent revenue
Arguably the biggest factor to judge any new disruption by is how much revenue it will ultimately bring in. Mobile Business Insights said that subscription offerings allow businesses to attract users through more evenly scaled pricing. As a result, customers have tended to respond more favorably, leaving businesses with the chance to keep clients for longer, which could of course lead to even further value.
In a December report, HfS said that this movement is also paralleling new trends in technology. Specifically, a source extract explained that the new platforms are critical to inspiring the transition to a service focus. Having effective and affordable management tools may also be required to support the response to customer demand and expectations.
3. Greater enterprise relevance
There is something to be said for the way this change can mimic the entire "subscription economy." This is a full-fledged trend that more enterprises are likely to be familiar with over time, and the software associated with it could also become commonplace.
In an abstract  for its own report, IDC predicted that the 2020 procurement software market will reach $5.6 billion. IDC Enterprise Applications Program VP Mickey North Rizza described the relationship between procurement, technology and the enterprise in general.
"Procurement is a critical function to organizations because it contributes cost savings, improves cash management, builds awareness and improves risk management practices, and even brings revenue when their efforts are tied to additional customer opportunities," she said. "But the right technology is required to enhance procurements efforts."
Procure-to-pay solutions can also be part of the focus on services as companies embed functions for a greater connection with the client.
Share To:

The Strategic Sourceror

Post A Comment:

0 comments so far,add yours