The digital economy is changing how business professionals work, thanks to new emerging technology. Almost all areas of business are undergoing digital transformation, including procurement. Innovative technologies such as cloud, AI/cognitive, machine learning, natural language processing, and big data/analytics are completely altering traditional procurement applications, digitizing procurement and partners.
Further automating the procurement process with these innovative technologies can help optimize decisions across multiple data sets while also enhancing decision making abilities contributing to better business outcomes. For procurement, better business outcomes are improved profitability in the form of cost savings, increased revenue with supplier on time performance and quality, and improvements in cash flow with the right contract terms. Business outcomes are being achieved at faster rates, thanks to these digitized, streamlined processes. IDC has identified five innovative procurement technology applications that solve real-world challenges procurement departments and their leaders deal with every day.
Real time Supplier ID and Rationalization
Too much time is spent trying to aggregate supplier information, right size the supply base and make sure new suppliers are considered for future business. New workflows automate the rationalization process and identify in real time the suppliers within given categories and commodities. With this new automation the supplier rationalization process from supplier item and service type to commodity to category is straight forward. It ties directly into the supplier life-cycle process, helping manage the supply base. In real time, companies can rationalize their own spend and supplier spend, making the right decisions for the future.
Intelligent Supplier Lifecycle & Relationship Management
AI enabled technology makes SRM a true innovator. Supplier relationship management applications function as the glue between different organizations, departments and data sets, enabling a collaborative team approach. SRM builds stronger and easier supplier relationships with insights gleaned from emails, ERP systems, multiple systems of record, and other procurement solutions. SRM applications offer insight into supplier performance, supplier risk, supplier compliance and supplier management from inventory to financing to building the right relationship with the supplier.
SRM technology helps organizations manage and build supplier relationships the same way a CRM builds customer relationships. Automated real-time views of the entire supply base from supplier onboarding to current, previous, and upcoming workloads to at-risk suppliers to retired suppliers or suppliers not in current use will help procurement to manage its supply base continuously. Up-to-date current information that can be modeled for future requirements will help procurement be more proactive in making better and more intelligent decisions.
Smart Financing
A real-time or near-real-time view of financing of the supply base will allow all types of financed orders to be viewed, monitored, paid, and understood automatically and in real time for all suppliers. The smart financing aspects for each supplier are automated in real time in terms of supply chain financing, letters of credit, incoterms, P-Card, ACH, checks, and cash. The opportunity for virtual cards, alternative methods of payment such as PayPal and others, and preset discount terms levels for purchases are just some of the ways smart financing is being achieved.
Real Time Invoice Match & Discounts
Visibility into invoices, invoice discounts, invoice deductions, and invoice matching means reconciliation can happen quickly and automatically, freeing humans up to doing more value-added tasks. Automated tools that match invoices and take discounts and deductions as appropriate are also starting to appear. This is a rote task best done by automation and relieves people to do more strategic, value-add work. It will also potentially provide costs savings, improved productivity levels, and accuracy (fewer errors).
Intelligent Contracts
Contract management doesn’t end with the signatures of buyers and sellers, it begins. Contract management applications enable contract authoring, editing, routing, signatures, analytics and ties into the performance of the suppliers to the contract. Contract management applications use innovative technologies such as AI, machine learning, and big data/analytics to enable a comprehensive view of contractual obligations that impact an organization’s business. Understanding the contractual obligations allows the business to ensure the right outcomes. Automation of the full contract authoring to negotiation to signature process means a more consistent and reliable process of executing contracts.
By staying on top of the trends, procurement professionals become more agile and more responsive to customer demands. Smart business leaders leverage cloud and other technologies to address the workflows of procurement and supply professionals, increasing productivity and visibility. These new technologies have incorporated SaaS, cloud, artificial intelligence (AI), and cognitive into the workstreams, enabling the technology to optimize workflows.
Learn more about the procurement applications that can make a difference in your organization; read about IDC’s new Innovators now:
