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?
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