Have you ever wondered if your procurement process is still as efficient as it used to be? With our companies undergoing a major shake-up courtesy of the digital revolution, it may be time for procurement departments to adapt their processes to this new situation. At the Big Ideas Summit 2020, Basware's Justin Sadler-Smith, General Manager UK and Ireland, and Christopher Blake, VP and Marketing Leader, had a clear understanding of the issue: rethinking procurement processes is vital in order to drive innovation and give a business a competitive advantage.
Could the procurement process become obsolete?
Both professionals agree that it's not a specific change that's needed within the procurement process, but rather the process itself that needs to undergo a radical transformation. With good reason, they point out how old this process is, "It's not an okay process that was built 20 plus years ago for a very different market, a very different type of buying, before the Internet in some ways and yet you have all the information out there". ». This often constitutes a barrier to meeting the needs of the company and its associated objectives. "You can still be compliant, but look at that process and think about: Does it make sense in terms of measurable outcome that's going to meet my business needs? A lot of the time, I think you'll find it won't", says Justin Sadler-Smith.
Fortunately, digitalisation and the development of new technologies will make the procurement process faster and more efficient. This in turn will then give companies a competitive advantage and help them achieve a return on investment. As such, nearly one in two procurement departments will have already partially or fully automated their procure-to-pay transactional processes, according to PwC in its latest "Digital procurement" survey.
In the interview, the two experts also focus on a particularly time-consuming process: calls for tender. These are not a waste of time as such, but the way that they are managed is no longer appropriate for today's needs. As Justin Sadler-Smith points out, "What's the waste of time is how [the calls for tender] are being constructed and how they're being written". It's true that managing calls for tender is often a long and time-consuming process. In some industries, these tasks are done almost entirely by hand, using Excel spreadsheets and email exchanges.
Innovation as a watchword
Finally, optimising the procurement process will boost the speed and efficiency of teams so that they can focus on higher-value-added tasks, such as innovation. Justin Sadler-Smith is a firm believer in this: "[Procurement departments] need to spend much more time with suppliers to look at innovative solutions, because there's loads out there. There's lots of really good stuff out there. But you've got to spend time with the suppliers to understand that, understand the ecosystem that's out there so that you can harness its technology to go and drive the innovation". »
The same is true of calls to tender, which need to harness innovation and new ideas, as well as comply with regulations. This is a value-creating approach that Christopher Blake supports, "This encourages the kind of competition between the vendors […]. And I think that if you're looking from the procurement perspective you should be challenging the experts, the vendors to work together to deliver you the best solution. Otherwise you're missing an opportunity to add value". »
As you can see, it has become absolutely vital for procurement processes to change. This will enable procurement teams to become more efficient, and therefore focus on higher-value-added assignments that can boost their company's competitiveness.