The digitalization of procurement has shaken things up in companies, but it has flooded the market with software offerings. At h&z, we will guide and support you in deciding which digitalization offerings make sense for your Company.
Today, buyers no longer need to be convinced that the digitalization of procurement processes (e.g. automation beyond order processing) makes sense. If they shop privately at marketplaces such as Amazon, and maybe use voice recognition such as Alexa or Siri to simply speak their wishes into a microphone, they have noticed long ago how cumbersome the procurement process in a company can sometimes be.
Chatbots instead of Excel
They often encounter free text inquiries in bidding processes, home-made Excel tables for offer overviews, manual transfers from one system to another, and communication with suppliers across various channels. Contract management and ordering, on the other hand, use a whole different system and mostly take place separately.
And outside, it’s a brave new world: advanced analytics, chatbots, robotics – there is truly no shortage of software offerings for heads of procurement. Providers of these software solutions and services, with the exception of two very big ones, often have between 100 and 1,000 employees and are changing constantly. The solutions they offer often come lean via the cloud in the form of „software as a service,“ always up-to-date, and solve the respective problem in procurement in a targeted manner:
- Negotiation processes
- Contract management
Semantic errors are corrected automatically, procurement volumes are aggregated easily and processed optically in „cockpits,“ supplier default risks are calculated, and decision proposals are generated or implemented directly in the Background.
Procurement 4.0: Best-of-breed offers versus suite offers
But are these solutions also compatible with one another? What are their pros and cons? What are their risks? And is buying everything individually even the right Approach?
The right software for every step: this is what is meant by „best-of-breed.“ At the same time, comprehensive suppliers offer one-stop solutions (keyword „suite“) that cover the whole procurement process. These full service providers are also busy consolidators: the takeover of best-of-breed providers by suite companies has picked up enormous Speed.
It is difficult to keep an overview, and even more difficult to reconcile the confusing offering with one’s own processes, restrictions and priorities within the company. The two main questions are:
- What is the best technical solution for the company?
- In which sequence should I introduce the Solutions?
Checklists for the roadmap to software implementation
The situation is different in each company. Decisive questions include:
- How is the process organized?
- Which automated systems already exist?
- Is there cloud approval?
- What is the greatest pain point?
- Where can we have the greatest effect most quickly?
It is useful to have somebody who knows the market for all of the software solutions in detail, who knows what is going on right now and who has a lot of experience due to a variety of client mandates; somebody who comes with prepared checklists, with exact decision-making criteria; and somebody who is independent, and therefore not pre-convinced of certain solutions that your own people may prefer to work with.
This allows for the creation of a schedule, a roadmap, where each step of the software implementation is carefully planned. With each step, the degree of professionalization in procurement increases; and the next step is already thought out when we start all the way at the bottom, because one decision defines the next.
To the next level with compatible system worlds
Combining procurement expertise with IT expertise: that is our approach. Our mission is to provide orientation and structure; like a general contractor on a complex construction site, we are assembling the modules that create a stable building at the end. We also support the companies during implementation of the solutions, and if they realize that the new solutions trigger a change process within the organization of procurement, and maybe within the whole company, we are ready to support them there as well.
The role of the buyers could become different, more exciting, after successful digitalization, since new digital tools will take many standardized processes off their hands. Buyers will have more time to take cooperation with suppliers and business partners to the next level. Suppliers do not just generate high costs (that must be lowered), they are also valuable partners with good ideas and innovations (that should be invested in).