We find ourselves today at a crossroads in how Procurement operates. The battle between rigid, manual, paper-based procurement processes and the “new-age” of procurement is coming to an end. The “new-age” of procurement can be simply defined as: Automation, from sourcing to payment. COVID is the straw that broke the camel’s back. It is the nail in the coffin for labor intensive, legacy procurement processes.
It’s quite easy to come to this conclusion when you look at the direction of our society. We want instant gratification. We complain when our new coffee maker takes more than 24 hours to land on our front doorstep from 2,000 miles across the country. Technology is replacing retail and changing service delivery at a rapid clip. The future of business and procurement is following shortly behind.
Think just 10 years back. It’s 2010 and you have a list of to-do’s before the upcoming work week. Your list includes a trip to the bank to cash a check. A trip to the vehicle repair shop for an estimate. A trip to the doctor for your annual check-up. A trip to the grocery store to stock up for the week. A trip to Home Depot to pick up cleaning supplies. A trip to Office Depot store to pick out school supplies for your children. A busy day! Then you plan to cap it off with a trip to the Movie theater to see a new film.
Today you could complete that entire list of tasks simultaneously while sitting in your pajamas, sipping coffee so long as your thumbs work to operate your iPhone. Take a picture of your check for mobile deposit. Snap some pictures of the dent on your vehicle and submit through the Geico mobile application. Press “order now” on your Whole Foods grocery order and Amazon shopping cart with all the cleaning and school supplies. Enjoy your virtual doctors visit. Then fire up Netflix to watch the new movie after an exhausting day. COVID has certainly added fuel to the dissipation of retail stores and rise of services able to be completed remotely. Tech is now replacing things we never though it could. Just look at education and learning. We’ve moved almost exclusively to eLearning since the rise of COVID.
So how is this indicative of change in the world of Procurement? You must look within the inner workings of fortune 1,000 companies today. Processes that you think would-be long-gone 15+ years ago are still happening. Folks are still faxing, mailing and calling-in orders. Procurement managers are filing away contracts to hopefully pull out on the right day prior to auto-renewal or missing a commitment. Suppliers are still processing orders and generating paper-based invoices. Accounts payable is still manually coding and reconciling invoices for payment. This is partly due to the fact that this is what some Procurement people and suppliers know and are comfortable with. It’s also in part because procurement technology which could automate all these processes has always been thought of as too expensive or complex to implement.
Buyers and suppliers entering the workforce today were born with a tablet in their hands. They had their first smart phone at age 10. Procurement software can now be easily integrated with existing ERP solutions making it easier to implement and less expensive. You don’t need to spend millions of dollars and thousands of hours to implement and benefit from procurement software.
The future state of procurement is upon us. Corporations need to invest in technology and the right level of services to make sure the technology is enabling the right process. Automation of Procurement is going to happen, so why not hop aboard now?