The increasing use of technology in procurement and sourcing is one of the most visible and urgent trends in the global supply chain. Communication in particular has become drastically faster in recent years. Failure to incorporate this new speed of contact into sourcing and procurement strategies is a missed opportunity for companies of all kinds, and it may open up an efficiency gap between businesses with competent information technology in procurement and those without.
The potential positive effects of a technology refresh are among the many reasons to embrace strategic sourcing. It will likely be easier to find an effective IT improvement plan for the procurement department when this section is more closely integrated with overall organizational leadership and direction.
Searching for a workable solution
As Spend Matters recently indicated, the tech tools powering modern procurement are complex and powerful. These products are also customizable, and no two sourcing departments will have exactly the same requirements. When it comes to adopting such a program, the best approach may involve gradual progression. First, the teams can select a spend analysis tool. Next, the company can add on a related e-procurement tool - or replace the vendor entirely if the first implementation has gone poorly.
The mere act of buying a software tool doesn't ensure it will provide value. Spend Matters noted that companies have to deal with possible confusion and a lack of familiarity with the potential outcomes of their new platforms. The source reported that better implementation and usage of software tools is necessary and added that as of now, numerous sourcing departments that have e-procurement products use them only one-fourth of the time. With a little extra knowledge and some collaboration with analysts and consultants, companies can get these statistics up.
Anticipating AI's rise
hat comes after today's IT tools? The answer to this important strategic question will likely involve better procurement analytics and data use. Artificial intelligence programs that use a flow of valuable data to make key decisions are in development, and they promise to be a fruitful next step for tech-conscious supply chain participants.
PYMNTS recently spoke with Xeeva CEO Dilip Dubey about how this technology will make its impact felt in procurement departments. He explained that supply chain executives shouldn't be afraid to think about moving into AI use if they still have trouble digitizing their transaction data and making it structured and machine-readable. Indeed, the powerful algorithms being considered for industry use could help make analog data into a usable resource for a company, without having to digitize it.
One of the most promising elements of AI is that these decision-making algorithms can fit into several different roles when integrated with more standard procurement technology. Dubey pointed to processes from sourcing to cataloging; anywhere there's data to assess, an AI program could help. Companies that want to ensure their supply chains run smoothly may soon have help from these new programs, with their own data serving as the fuel. For businesses still struggling with the early stages of e-procurement, this future enhancement can serve as further motivation to evolve.