Procurement Technology: 6 Solutions You Should Know In 2024

Improvements to existing procurement processes, procedures, and operations are as time-sensitive as ever. In the 2024 State of Procurement Data Report by Amazon Business, 95% of decision-makers surveyed acknowledge that there’s room for procurement optimization.

Teams will need to rely on greater investments in the right tools and technology to make these optimizations, from no-code automation to AI and data analytics. That’s where procurement, sourcing, and purchasing technology comes in.

Learn about six solutions that can be applied in 2024, why you should apply them, and how to get started. 

Procurement technology landscape

Procurement technology is primarily designed to simplify procurement processes and reduce costs, but it’s grown to offer so many more benefits than that, with the greatest one being transforming procurement into a source of reliable strategic influence. 

Because procurement teams provide critical insights to inform business strategy, identifying opportunities to cut costs is one of the most important ways they do this. Procurement teams also share crucial data and information that business leaders need in order to make choices, set strategy, and remain competitive. Finally, procurement teams are responsible for anticipating and responding to disruptions in the supply chain and their own process.

To do any of these effectively, they need the right procurement technology. From procure-to-pay software to spend management and analysis tools, procurement technologies are disrupting the status quo and bringing efficiency to teams like never before.

6 procurement technologies to improve your business

Transform analog, manual, and paper-ridden processes with end-to-end digitization and automation to improve security, visibility, and control with these six procurement technologies.

Procure-to-pay software

Procure-to-pay software are powerful tools that streamline the purchasing process and accounts payable systems, effectively merging the workflows and increasing speed, visibility, and control. P2P solutions have revolutionized procurement (and continue to), and are now essential for boosting business productivity and efficiency. 

P2P software like Pipefy makes it easy to fast-track PO cycle time and streamline stakeholder coordination. It empowers procurement teams to become strategic partners by fortifying the bridge between purchasing and accounts payable and automating workflows which creates more time to focus on high-value work that maximizes efficiency. 

A good procure-to-pay software can seamlessly integrate with existing tech stack. Consolidating all P2P activities in one place will provide a better experience for employees, requesters, and suppliers. This will also prevent spreadsheet sprawl, missing information, or errors as a result of manual, human intervention, which all translates into more accurate spend management and forecasting.

P2P software can automate workflows and activities such as:

  • Purchase request intake and review.
  • Purchase orders.
  • Invoice approvals.
  • Contract and compliance management.
  • Supplier performance management.
  • Work handoffs between teams or processes.

Supplier management system

A supplier management system is a tool that enables businesses to effectively manage their supplier relationships. The system gives the ability to automate and streamline supplier management processes, giving visibility over supplier performance, offering better experiences, and valuable insights. 

This technology can build a self-service supplier onboarding process and experience that keeps suppliers in the loop from the very start without limiting their visibility. It also simplifies how they communicate with buyers, accounts payable, update records, submit invoices, and track payments.

A supplier management system also allows businesses to make informed decisions about their suppliers because it shines a light on supplier performance, leading to improved savings and enhanced supplier relationships.

Contract management

Contract management tools help control fragmented data and workflows that make it difficult or impossible to manage contracts. When businesses have poor contract management, buying and negotiation power suffers, quality issues arise, and problems with delivery go unaddressed.

A contract management software (CMS) provides visibility and process structure to prevent fraudulent activity like inflated invoices, unapproved purchase changes, and single-source supplier/vendor schemes. 

This software acts as the legal guardian for procurement teams, simplifying the complexities of contracts. A contract management system will automate the entire contractual process, from renewals to workflows, eliminating errors caused by manual inputs and lack of accountability.

Compliance and risk management

Procurement risks arise from processes that go unchecked, are unstructured, and don’t follow a standard compliance policy or procedure. Unstandardized processes and lack of accountability allow maverick spending and unapproved spot purchases to snowball.

Compliance and risk management tools can solve these problems and more. Through automation, rules, and conditionals, teams can ensure compliance and that processes are executed the same way, every time. Structuring (and standardizing) processes is the first step to addressing and preventing risks.

Spend management and analysis

Spend management and analysis tools allow businesses to level up procurement processes with improved forecast accuracy and cost control. They use technologies such as AI to give businesses a peek into their spending habits and identify areas where cost savings can be achieved.

This strategic procurement technology allows businesses to comprehensively understand their spending by importing and analyzing data from multiple sources, including purchase orders and invoices. All this is possible due to features that highlight spending patterns or categories and suppliers that consume the most resources.

Spend management and analysis tools can even compare the procurement performance to industry benchmarks or other companies. By leveraging data visualization, businesses can quickly identify patterns and trends and act fast to reduce costs.

Procurement analytics

Procurement analytics is the analysis of procurement data through the process of organizing, interpreting, discovering, and sharing patterns, trends, or insights. This analysis identifies risks, inefficiencies, and opportunities to streamline or optimize procurement workflows. It’s also a great source for making better, more data-driven business decisions.

Procure-to-pay analytics is important because it offers a layer of visibility and transparency to data across the entire P2P cycle. This analysis draws meaningful insights, measures process performance, and provides a clear picture of company spend management. 

Examples of procurement analytics that can be drawn from the procure-to-pay cycle are:

  • Spend analysis.
  • Cost breakdown analysis.
  • Supplier performance analysis.

The future of procurement technology

Procurement trends for 2024 highlight growing tech spend and areas like talent development and the transformation of procurement into a more strategic player as an orchestrator of business value.

It’s estimated that by 2031, the global procurement analytics market will reach $32.3 billion — and leaders are preparing for an increase in spending with many preparing to make larger Investments in technology like AI, automation, and data analytics.

In the 2024 Amazon Business report on procurement data, 98% of respondents report having plans for investments in analytics and insights tools, automation, and AI for their procurement operations in the next few years.

To keep up with the future of procurement technology, here are five trends shaping procurement technology in 2024.

1. Automation

Business process automation (BPA) refers to the use of software to minimize and enhance human effort within business processes. Since each process is composed of a series of tasks and workflows, the primary goal of BPA is the automation of as many elements of the process as possible.

Pipefy’s survey of business and IT leaders found that primary drivers of adoption automation lean on increasing efficiency, improving productivity, reducing errors, and generating greater cost savings. It’s clear that procurement teams need a solution that not only improves day-to-day operations but also future process demands as they arise — independent of IT and without compromising agility.

2. Artificial intelligence

Artificial intelligence resources are starting to play a big role in procurement. AI can process a large volume of data quickly, eliminating the guesswork and serving up real-time insights for faster, more informed decision-making.

This makes it easy to review categories with the most volume purchased, track SLAs by category, buyer, or any specific phase, and analyze vendor performance by measuring most discounts given, biggest purchase volume, or average response rate. Additional benefits for applying AI to existing process automation initiatives include better use of employee time, more operational efficiency, and cost savings.

3. Cloud-based technologies

Cloud-based technologies are extensive networks of remote servers that allow people to work collaboratively around the world. These servers store and manage data, run applications, and deliver content and services in real time. This technology helps procurement teams be more productive and agile. 

4. Blockchain

Blockchain is a form of database that provides a secure and transparent way of tracking valuable or sensitive information. Because procurement processes handle a lot of confidential and sensitive data, having a secure flow of information is necessary. 

5. Cybersecurity

Very important to sourcing technology, cybersecurity is the practice of protecting systems, networks, and programs from digital attacks such as ransomware or phishing. 

As a company’s IT stack adds more e-procurement tools, the role of cybersecurity in the procurement process becomes integral to protecting sensitive corporate data and mitigating the risks inherent in an ever-expanding supply chain. This creates a need for no-code tools that enable IT control and governance without limiting business agility and autonomy. 

Procure-to-pay software for procurement innovation

While procurement can help identify and exploit new opportunities and avoid unnecessary risks and wasteful spending, the greatest benefit procurement can offer is its strategic influence. Insights and data from the procurement team can play a decisive role in strategy, from determining which suppliers to use, calibrating spend, assessing risks, finding opportunities to improve operational efficiency and competitive advantage.

Pipefy is a tool that combines process management and automation capabilities with a no-code user interface and generative AI to give procurement (and other) teams everything they need to become the strategic partners businesses rely on to remain agile and lean.

With Pipefy, teams can: 

  • Communicate more efficiently with stakeholders, vendors, and requesters.
  • Streamline the P2P processes through automation.
  • Get accurate data to measure, control, and improve business cost optimization.
  • Reduce errors, redundancies, and costly processing and sourcing mistakes.
  • Reduce the possibility of financial losses or delayed payments.

Become a strategic influencer
Try Pipefy for Procurement

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