3 Critical Components of a Modern Procurement Management Platform

3 Critical Components of a Modern Procurement Management Platform

Over the past two months, I have been publishing a five-part series on how modern businesses can better organize and manage their procurement processes. While the first three pieces in this series covered emerging trends in procurement management and the tools needed to streamline operations, this article will focus instead on the goals and benefits of a modern procurement management platform. By using these three components as strategic goals, procurement leaders can quickly improve the financial and logistical efficiency of their procurement processes.

Procurement infrastructure has seen significant investment and effort in automating and simplifying transactional tasks. However, complex and strategic projects are still predominantly orchestrated and managed using comparatively primitive tools: email and spreadsheets. By automating the acquisition and purchase processes, organizations can combat the increasing costs of goods and services while also more effectively managing the challenges of supply chain disruptions. Organizations shouldn’t overlook the procurement process in their digital transformation strategies; instead, they should adopt an end-to-end solution that meets the following three goals.

1. Full alignment across internal teams

Why do so many organizations still rely on email chains and spreadsheets to organize expansive, multi-million dollar processes? The answer lies in the sprawl and fragmentation of their tools and technology. When multiple teams within a company each use their own tools to manage and monitor sourcing and purchasing, it becomes impossible to identify any high-level opportunities for improvement or consolidation.

A modern procurement management platform should effectively supplant a company’s existing, fragmented toolset. By offering a single point of entry and an easily understood user interface, this type of platform removes barriers and enables every employee throughout the organization to enter information and keep track of progress. Users can also configure the platform to send request forms automatically to the right parties for review, streamlining an otherwise time-consuming process and ensuring that all approvals can be easily stored and found in one location.

Finally, modern procurement platforms can streamline adoption and integration by offering seamless connectivity to existing self-service options.

2. Visible execution and management processes

Once internal teams have achieved alignment through a single platform, their next step is to track and monitor their procurement projects and activities on a simple dashboard. An effective procurement platform will lean towards cleanliness and simplicity, displaying all approvals on the same screen; easy-to-use Gantt charts to address team and individual project loads; and an array of internal data through useful visualizations and decision boards.

The most important goal when upgrading a procurement platform is consolidation: bringing every aspect of procurement orchestration together in a single system. Procurement leaders should be able to determine objectives, gather requirements, invite suppliers, obtain approvals, set baselines and agree on benefits without ever having to leave the platform. Even better, an API-based solution enables enterprises to connect the dots between existing solutions and their new platform to maximize efficiency across their tech stack.

3. Consolidated data to measure KPIs

The tangible benefits of an improved procurement system are obvious: faster operations, lower costs and more efficient use of resources. However, a modern procurement platform should offer additional benefits that might not be obvious at first glance. A modern platform will consolidate data from throughout the system, providing one-click reporting on project savings, supplier win/loss ratios, and crucial diversity and ESG benefits. Moving from manual tracking to an automated system allows organizations to get far more granular with their analysis, tracking financial benefits by commodity and over time.

With this level of simplicity, project leaders have full line of sight into their operations at a moment’s notice. This makes it possible for managers to nip potential issues in the bud before they grow into more complicated challenges. A modern platform also makes it easy for procurement managers to advocate for their own successes: when the data is clear, understandable, and accessible to every executive, the value of the transformation becomes obvious.

By digitalizing and automating those processes that are currently managed using legacy solutions, enterprises will be able to quickly see and evaluate what’s working (and what isn’t) in their procurement strategy. The three components laid out above all make the case for synergy: addressing all aspects of procurement orchestration within the framework of a single solution. This transition doesn’t have to be a rip-and-replace: the best procurement management solutions will integrate with legacy systems, consolidating data and optimizing the ROI of existing investments. Above all, a modern procurement management solution should facilitate collaboration, providing every team with a level playing field and a common set of goals to guide complex operations.