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Create a Perfect E-Procurement World with Advanced Technology

11/01/2018 By

You get procurement; we get procurement; your end users don’t get procurement — and that’s exactly how it should be. A perfect world in e-procurement is enabling end users to get exactly what they need quickly, easily and in compliance with procurement policy without having to understand the intricacies of that policy, while also empowering procurement teams with the right digital capabilities to support strategic initiatives behind the scenes. That’s why I’m particularly excited about a host of new advanced technology that is making this perfect e-procurement world a reality for many companies.

Going Beyond ‘User-Friendly’

It’s not about a “user-friendly” interface anymore — people expect that today. They’re ordering household goods at the push of button on Amazon, making professional-looking videos on mobile devices and Snap-chatting funny pictures to their grandmothers. User-friendly is like the old mobile phone slide-out keyboards compared to the expectations users now have of smartphones — it got the job done better, but now people have mini computers in their hands. There’s a deeper level of sophisticated technology that powers cutting-edge e-procurement solutions to go beyond user-friendly and become integrated, engrained, natural — an extension of fingertips, a liaison between systems, a single source of truth, a platform for next-generation procurement.

Getting to 100% User Adoption

And why is going beyond user-friendly so important? Because the goal of any system — especially e-procurement — should be 100% user adoption. If e-procurement truly makes people’s lives easier and their time spent more valuable, then they will use it every single time. As a procurement professional, you care about this because you cannot be effective in reaching your strategic goals without 100% user adoption of e-procurement. The system implemented is only good if people use it. So, I ask you this: Would you rather spend time policing people on spending or focus on driving cost savings, negotiating better contracts, right-sizing the supply base, sourcing innovation, strengthening your supply chain and reducing risk? Advanced technology makes it possible for you to focus on these strategic initiatives.

Leveraging Advanced Technology

Modern e-procurement solutions are built on advanced technology that fully integrates the system into your procurement process. Some of my favorite pieces of recent innovation that are transforming how procurement operates include:

  • Product Master Data Model for Catalogs: Basic ordering for things like laptops, office supplies, marketing materials, etc. can be covered by the standard e-catalog functionality. But moving beyond the basics, some industries like healthcare and oil and gas (O&G) require reliability to ensure critical items are available immediately when needed — especially as we’re seeing companies reduce stock and warehousing to minimize inventory carrying costs. This means procurement professionals are often negotiating multiple contracts with different suppliers for the same items or variants of that item to ensure reliability, instead of consolidating those suppliers to generate cost savings. The result is the end user is offered multiple choices when they need to purchase something like rubber gloves, for example. They don’t know why there’s so many options or why there are different price points, and nor do they care to understand how the supply chain works — they just want to order the gloves their medical practice needs to be operational and you want them to pick the most cost-effective option. Modern e-procurement suites solve this problem with a flexible product master data model on the back end of the solution that allows procurement departments to model a database of critical products, each product having multiple suppliers, prices, units, etc. Then a highly intelligent algorithm automatically selects or suggests the best option of available products to the end user based on various circumstances that factor into the decision: location, price of day, delivery reliability, etc. This promotes effectiveness in procurement while also making the ordering process as simple as possible for the user.
  • Guided Purchasing: You want the time and effort you spend negotiating favorable contracts to be worthwhile, but potential savings do not translate into actual savings unless employees purchase goods and services from preferred vendors. This is where guided purchasing comes in. This piece of functionality increases compliance with vendor and pricing policies while simplifying the buying process for users. By displaying easily recognizable “purchase icons,” the solution directs users to specific channels for buying certain items (e.g., IT purchases, marketing collateral, mobile phones, etc.) Guided purchasing is about narrowing the options for users, so they can still easily get what they need while you can ensure they’re buying on-contract whenever possible.
  • Conversational Systems: With the proliferation of devices such as Amazon Echo and Google Home, artificial intelligence has become a part of everyday life, whether we realize it or not. These conversational systems — also known as chatbots — are popping up everywhere, and the purchase-to-pay world is not exempt. Chatbots save time, make the purchase-to-pay solution easy to use, eliminate the need for users to go back and forth with questions to one another, and reduce frustration. There are a host of tasks that can be completed by simply asking a chatbot for help — no more searching, scrolling, clicking or typing — just simple questions with accurate answers. Need to re-order supplies? Simply tell the chatbot. Do you need to look up a previous invoice to see how much a contractor billed you? Simply ask the chatbot. Ultimately, chatbots enable companies to reap unparalleled efficiency and garner high levels of user adoption for purchase-to-pay systems while delighting their users.
  • Sophisticated Search: Advanced search capabilities that allow users to find the products and services they need easily and quickly go a long way in driving user adoption of any procurement solution. And it’s not just about having a simple and intuitive user interface; it’s the underlying data model and indexing capabilities that make all the difference. At Basware, we recently rolled out enhancements to the search functionality that enable users to find the right product easily, while at the same time increasing response times and scalability of the solution. The search functionality is intelligent in that it allows line level rules to govern how a vendor is selected for specific products and it supports dynamic filters to flag certain products based on specified criteria — for example, showing products that are company standard, certified or recyclable. It also supports personalization, so users can create filters and save their searches for future use.
  • Advanced Approvals: Fast approvals are necessary for quickly getting users the items they need. Modern e-procurement tools should automatically issue POs and place orders as each individual item on a requisition is approved, without waiting for the other line items on the same order that may require extra approvals. This is called line item requisition approval workflow. The alternative is a linear approval workflow, where each step is dependent on the previous step for the entire order, meaning all the POs are held up until the entire approval workflow is complete for that order. This means all POs are reliant on the final approval in the linear chain and the entire process slows way down. Ultimately what happens in the linear scenario is your users get fed up with the slowness of the system and start purchasing outside the system — often referred to as maverick spending — so they can get what they need faster and easier.
  • Materials Transfer: Not only do industries vary in requirements for immediacy, some industries face unique challenges. O&G companies have a distinct operating structure that requires them to move large, expensive pieces of equipment from well to well. As they do so, they need to properly account for the associated debits and credits to the different wells, each of which may have a unique ownership structure, while also tracking the condition and location of the equipment. Traditionally, this is a very manual process involving a lot of time and spreadsheets. But with industry specific functionality integrated with procurement, materials transfer can be automated — saving tons of time and increasing visibility over expenses and equipment.

The Devil’s in the Details

Understanding technology is not just for the techies and geeks anymore. In the wake of digital transformation, it’s critical for stakeholders in the business to understand how innovation can take them further than basic automation. If you’re evaluating procurement technology, be sure to dig into the details of the solution and ask the provider how they are innovating for the future. Choosing the wrong solution can lead to mediocre results and a lack of return on investment; choosing the right solution can mean creating your perfect e-procurement world.

Learn more about Basware’s approach to procurement — called WeProcurement — and check out our product roadmap to learn about the latest innovation we’re working on.

Ready to learn more?

Let us help you build the business case for procurement automation and advanced automation technology — reach out!

Sami Peltonen is Basware’s vice president of product and business management, North America.