How Promena helps customers with our managed services model

Digital transformation has been one of the top-trending topics in recent years. As people, we are trying to get the most out of digitization — from redesigning the world of work to making our lives more comfortable. In the business world, it is impossible not to have noticed the waves that digital transformation is making, as manifested by its many benefits.

Digitization is most visible on the sales, marketing, production and finance fronts. And indeed, strategic sourcing in procurement must also be included on the list.

With its growing importance and direct impact on company balance sheets, procurement has become pivotal for organizations. Companies now understand the importance of lucrative purchases and base their entire policies on that premise. It cannot be overstated how important it is to integrate digital solutions into procurement processes.

So, what does digitally powered procurement mean, or, are there additional services needed besides digitization?

Today’s article is dedicated to my thoughts on these issues.

Just a few years ago, procurement departments had fewer technology options to replace manual processes, and this is still the case in some countries. Procurement professionals found themselves having to trawl through piles of requests on a daily basis, and usually failed to transform those requests into purchase orders in an effective and efficient way. And to make matters worse, if they did not have a reference price on hand for those requests, they had to scramble to collect quotes through conventional methods of emailing and phone calls. And there was no performance or risk management for suppliers. When they got to the end of the process, they would provide feedback to management via backdated reports.

To put it simply, digitally powered procurement means operational efficiency, financial benefits, traceability and access to vital data. On a more detailed level, digitization covers predictive analyses, data analytics, ERP integrations and end-to-end processes.

There are global players in the market that provide these services. At Promena, we are fully onboard with digitization and the practical solutions that it provides, supporting customers on their journey to digitization with our modules.

But can just one single software solution be enough? Do companies also have different expectations or need a different type of service while running their processes digitally through the system?

The answer to this is a resounding yes.

Our customers, both existing and potential, often voice one particular request. “We are supposed to run this process through the system, but can you manage the process on our behalf? In other words, can you take charge of the process?”

In the rest of the article, I’m going to try to formulate an answer to this question and focus on our managed service model, one of Promena’s strongest suits.

Many procurement platforms around the world are licensed products, and all the above steps are digitized and transferred to the system. However, having a running system in place is definitely not enough for procurement operations with a complex structure that involves many suppliers and requires advice with modeling.

Think of a procurement scenario — one that contains a litany of suppliers with interrelated products, formulations and coefficients involved. Even when you have a system on hand, it can be quite difficult and time-consuming to involve the relevant suppliers through the system, to support them in using the system, to integrate the purchasing operation into the system through modeling, and to answer operational and technical questions from suppliers while the process is ongoing.

In such cases, a Promena Account Manager manages and finalizes a series of steps from the modeling of this process to its transfer to the system, from supplier training to the final reporting of the process, all on behalf of the client. Clients need only communicate their specific demands to the Promena team, who will involve them solely in decision-making processes that require their approval, and they can then observe as the process is brought effortlessly to a satisfactory conclusion. The entire operation is executed single-handedly by the Promena team.

With this model that offers great advantages in electronic procurement processes, procurement professionals do not need to have one-on-one conversations with suppliers. The amount of time saved means that the financial benefit is much higher than that offered by the self-service model. This is because the process modeling that realizes financial benefits is managed by customer managers who have extensive experience in this field. Changes to the competition rules during bidding or additional tender rounds also play an important role in increasing savings. When it comes to electronic tenders via the managed service, 1% more savings are generated than with the self-service model. This has serious financial implications, particularly when it comes to high-volume transactions.

The number of processes performed annually by our customers on the Promena system is approximately 40,000. And 10% of these processes are overseen via the managed service model. If you would like to benefit from our managed services model please reach out by sending an email to sales@promena.net.

Orçun Güven is the Director of Promena’s Strategic Sourcing Services. He’s responsible for holding local market leadership and increasing global recognition.