In 2024, the challenges faced by procurement professionals are numerous and considerable. Some of the issues faced include intensified pressure under calls for increasing sustainability, sometimes in direct conflict with cost saving, another high-pressure need.
In addition, technology continues to develop rapidly, and many teams are finding the ‘tried and tested’ methods of procurement are beginning to fall behind the demands of the business in terms of efficiency and productivity.
Compliance is another complicated concern, with rogue spending creating problems and risks down the line as suppliers are awarded contracts without undergoing the necessary due diligence and vetting, which must then be completed retroactively. By this time, any issues uncovered have limited scope to be remedied, and cause a potential ripple effect to other areas of the business.
Data and regulations continue to change and develop at break-neck speeds, meaning oftentimes procurement teams are left making decisions reactively, rather than being able to accurately predict and prepare for multiple possible outcomes.
In order to accurately address these issues and meet the needs of a modern procurement team, change is necessary.
As previously mentioned, technology continues to develop, and there has never been more choice in relation to all manner of solutions covering every aspect of procurement. It may feel more comfortable to work with more outdated forms of supplier management – after all, an excel spreadsheet ‘works’, technically. However, this is limiting your team’s potential by choosing more familiar (but less effective) methods.
Current market trends indicate that the uptake of technology in procurement spheres will not slow down nor regress – so by putting off adoption, you are merely kicking the proverbial can down the road, and inviting your competitors who were quicker off the mark to outpace you.
Technical solutions, including but not limited to software which features AI and automation, help procurement teams to improve their accuracy, with the knock-on effect of increasing productivity, growing savings, better compliance rates, and more control over spending. It does this by expanding visibility over data, speeding up the transfer of information through automation and task-based workflows.
It can even help to verify supplier information through external data sources, an integral part of the procurement process:
“Invest in data quality and augment with external data sources where required. Procurement leaders have traditionally relied on spend data to monitor emissions. Sustainability-related activities require more complex data streams, often involving more complex attributes. Firms should start with spend data, but work to augment with other data sources where possible.” – Forrester, Jeffrey Rajamani, June 2024, ‘Procurement is the Key to Sustainable Supply Chains’ , Procurement Is The Key To Sustainable Supply Chains | Forrester
There is a wealth of available data to help teams to measure and manage supplier performance across a variety of different KPIs, including but not limited to sustainability. This data is often held by third parties, so having an easy, reliable, and secure way to connect with these databases makes the process of validating supplier information much simpler.
Complex data, and the sheer amount now required by escalating legislation, creates issues for procurement teams working at full capacity. No matter the geographical location, tightening legislation requires data that is compliant prior to legal rollout, or you begin on the back foot, risking falling out of compliance by default.
This kind of workload and attention to detail cannot be undertaken manually and efficiently. The risk of inaccurate or missing data related to manual data management is real, and wholly unnecessary. Outdated systems lead to further delays in achieving compliance as obsolete processes struggle to keep up with demand, leaving you vulnerable to scrutiny and scandal.
It is an investment which needs to be made into your team, to support them to do more with the time they have. A digital solution is the answer for long-term success, but more than that it is becoming the new baseline. Automation, artificial intelligence, and other smart technologies are fast becoming basic, starter-level tools for greater efficiency and performance.
It is important, now more than ever, not to get left behind.