Beyond the hype: How orchestration is shifting the procurement paradigm

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There is growing enthusiasm among procurement professionals, vendors and industry pundits about the concept of procurement orchestration. Spend Matters notes it as a key emerging market that is “meant to break silos and create bridges between applications, thereby making [procurement] complexity less visible or even disappear.” Dr. Elouise Epstein, one of the preeminent experts on digital procurement and how it affects supply chains, also cites orchestration as one of the coolest things to happen in procurement in the last year.

In a world of suites and best-of-breed (BoB) solutions, orchestration has the potential to disrupt the procurement market. For all the excitement, however, there is also growing confusion – and more than a little hype – around what exactly constitutes orchestration, and what it portends for organizations and users. The reality is that orchestration requires a rethinking of the procurement technology landscape and the strategies organizations use to manage spend and supplier engagements.

What is procurement orchestration?

To assess orchestration’s impact, we must first understand what it is, and what it isn’t. Orchestration is not another name for a suite, which is essentially a collection of applications from a single vendor that, at best, share a transactional database. It’s not a fancy way of saying ‘integration.’ And it’s not a thin veneer or add-on that simply sits on top of existing solutions to fill feature gaps, such as user interface (UI) issues or AI wizardry.

Instead, orchestration is a way to connect and coordinate people, processes and systems across an organization. It goes beyond performing discrete transactions to facilitate the efficient flow of tasks and information over time and across agents, including people and systems (i.e., digital agents). This includes facilitating each step in a given process, even if that step is in a different system or department, allowing teams and organizations to get work done faster and without frustration.

Why is procurement orchestration a game changer?

By coordinating activities between human and digital agents and centralizing processes through a single rules and decisioning engine, orchestration provides stakeholders with a single, unified experience across all stages and steps in the procurement process. The result? Effortless user experiences, complete visibility and agility in response to change.

Effortless experiences

For internal requestors, orchestration is about creating effortless experiences. Without an orchestration platform built for procurement, processes are typically created and enforced through documentation – documentation that is often outdated, complex and ignored by infrequent stakeholders.

By unifying every process step in a single platform, users don’t need to learn how to navigate multiple systems. Process standardization is enforced automatically, without the need for complicated documentation or hand holding by procurement teams. Where experiences are unified and intuitive, organizations can expect a decrease in stakeholder frustration and a decrease in maverick spending as procurement processes come to mirror the buying process of everyday consumers.

Full visibility

Visibility across procurement processes is important for a number of reasons. It improves auditability and decreases risk, especially for high-compliance industries like banking and pharmaceutical manufacturing. It allows stakeholders to see first-hand how requests are progressing, including estimated completion time. And it unlocks the ability to identify and address process bottlenecks through process mining.

Orchestration makes process mining possible in ways that application suites or mere integration are unable to deliver. Why? Two reasons:

1) Traditional procurement solutions focus on transactions rather than processes

2) Many steps in a given process take place outside and between systems rather than within them

Improved agility

Most modern workflow orchestration or business process management solutions are low-code/no-code platforms. As a result, implementations are faster and it is easier to make process changes in response to policy changes or to address process bottlenecks.

As the market for general-purpose low-code business process automation platforms becomes increasingly cluttered, there are important advantages that come with an orchestration platform that is built specifically for procurement, including:

• Lower barrier to entry: Procurement professionals who want to make process changes can do so intuitively rather than having to go through extensive training to understand complex systems and IT-centric vocabulary.
• Fast updates: Workflow configuration is fast because most common tasks can be dragged and dropped as modules rather than having to be built from the ground up.
• Low maintenance: Orchestration platforms built for procurement already ‘understand’ the specific kinds of work and systems that make procurement possible. For example, they understand what a supplier is, how document requirements differ from region to region, and how systems need to integrate with one another in order to coordinate activity. In other words, a lot of core business logic and automation features are pre-built into the platform itself and are maintained by the vendor, significantly reducing (if not eliminating) the maintenance burden for customers and business users.

In short, procurement orchestration is not another word for a suite. It is not just integration. And it is not simply a way to fill feature gaps within existing systems. Procurement orchestration is an important solution that complements suites and BoBs and delivers incredible workflow experiences, visibility and improved agility – and it’s poised to change the entire procurement paradigm.

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