insights1 DIGITAL PROCUREMENT TOOL PATTERN AS GAME CHANGER

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Welcome to the research conducted by SWISS IPG on Digital Procurement Tool Patterns.

In today's rapidly evolving business landscape, organizations are increasingly recognizing the importance of leveraging digital technologies to optimize their procurement processes. Digital procurement tools play a crucial role in transforming traditional procurement practices and enabling organizations to achieve greater efficiency, cost savings, and strategic value.

Our research aims to provide an in-depth understanding of the digital procurement tool patterns that are driving innovation and shaping the future of procurement.  Our analysis is part of IPG's well-known PPE (Procurement Performance Excellence) approach, which regularly assesses the performance of purchasing organizations and has already been used by several thousand organizations.

We explore a wide range of tools and solutions that support various procurement functions, including sourcing, supplier management, contract management, risk mitigation, sustainability, and more. By identifying and analyzing these tool patterns, we aim to equip organizations with valuable insights and practical knowledge to make informed decisions in adopting and implementing digital procurement solutions.

Throughout this research, we delve into the core processes of procurement and highlight the specific tools and technologies that are transforming each process. We examine tools based on emerging technologies such as artificial intelligence, blockchain, data analytics, and automation, among others. Furthermore, we explore how these tools address key challenges in procurement, such as supply chain transparency, sustainability, risk management, and innovation.

To provide a comprehensive overview, we also present a curated list of firms that offer digital procurement solutions. These firms are at the forefront of developing innovative tools and platforms, and their expertise can help organizations navigate the complex landscape of digital procurement.

By exploring the Digital Procurement Tool Patterns and understanding the capabilities and benefits they offer, organizations can enhance their procurement strategies, optimize operational efficiency, drive cost savings, mitigate risks, and foster sustainable and responsible procurement practices.

Join us as we delve into the world of digital procurement tools and uncover the patterns that are shaping the future of procurement. Together, we can unlock the full potential of digital transformation in procurement and drive organizational success in the dynamic and competitive business environment.

NEW ERA OF BUSINESS DESIRES NEW APROACH & TOOLS TO MANAGE:

1. Target-to-Reality:

• Target-to-Reality is the process of setting procurement targets and translating them into actionable plans and results.
• Challenges in this process include aligning targets with organizational goals, ensuring accurate data for tracking progress, and effectively monitoring and adjusting strategies.
• Digital procurement tools for Target-to-Reality can include performance dashboards, KPI tracking software, and data analytics platforms.
• These tools help monitor and visualize key metrics, track progress towards targets, and provide real-time insights to make informed decisions.

2. Strategy-to-Innovate:

• Strategy-to-Innovate involves developing innovative procurement strategies to drive business growth and competitive advantage.
• Challenges include identifying market trends, exploring new technologies, and fostering a culture of innovation within the procurement function.
• Digital procurement tools for Strategy-to-Innovate include market intelligence platforms, innovation management software, and collaboration tools.
• These tools help identify emerging trends, evaluate supplier innovation capabilities, and facilitate collaboration with internal and external stakeholders for innovation initiatives.

3. Strategy-to-Category:• Strategy-to-Category focuses on developing effective category strategies to optimize procurement activities and drive cost savings.

• Challenges include analyzing spend data, identifying category opportunities, and developing sourcing strategies.
• Digital procurement tools for Strategy-to-Category include spend analytics software, category management platforms, and e-sourcing solutions.
• These tools enable data-driven decision-making, automate sourcing processes, and provide insights for strategic sourcing initiatives.

4. Strategy-to-Supplier:

• Strategy-to-Supplier involves developing and managing strategic supplier relationships to ensure a reliable and sustainable supply chain.
• Challenges include supplier selection, performance monitoring, and risk mitigation.
• Digital procurement tools for Strategy-to-Supplier include supplier management systems, supplier performance tracking software, and risk assessment tools.
• These tools streamline supplier management processes, track supplier performance metrics, and provide visibility into supplier-related risks.

5. Demand-to-Contract:

• Demand-to-Contract encompasses the process of managing demand, sourcing goods and services, and negotiating contracts.
• Challenges include demand forecasting, supplier selection, and contract negotiation.
• Digital procurement tools for Demand-to-Contract include demand planning software, e-sourcing platforms, and contract management systems.
• These tools enable demand forecasting, automate sourcing processes, and streamline contract creation, negotiation, and management.

6. Purchase-to-Pay:

• Purchase-to-Pay covers the entire procurement lifecycle, from requisitioning to payment processing.
• Challenges include manual and fragmented processes, compliance management, and invoice processing inefficiencies.
• Digital procurement tools for Purchase-to-Pay include e-procurement systems, e-invoicing solutions, and automated payment platforms.
• These tools automate procurement workflows, streamline invoice processing, and improve spend visibility and control.

Sustainable TOOLS are of importance for ESG politics and rules around it.

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Source: IPG Research

The issue of sustainability in purchasing is more important than ever for companies. This is confirmed by the new study "Sustainable Procurement and Responsible Supply Chains 2023" by the Jaro Institute for Sustainability and Digitization e. V. in cooperation with the CBS International Business School and Unite, provider of a B2B platform for procurement processes.
Accordingly, 65 percent of those surveyed consider the topic to be very relevant. In the reference study in 2020, it was only around 54 percent.

For many companies and organizations, sustainability is still an abstract topic. Those responsible often find it difficult to tackle the necessary changes holistically.
About a third of the study participants have implemented or started a sustainable procurement strategy. A similar result can be seen in the training of the company's own employees. But only twelve percent have integrated sustainability criteria into the supplier assessment.
And just around six percent train the suppliers, although cooperation and know-how transfer are key success factors for the implementation of a sustainable procurement strategy. Here it is important to develop strategic approaches and solutions in close cooperation between management, purchasing and suppliers - based on a thorough examination of your own initial situation and a materiality analysis.

There is a lot for companies to do because the market expects more responsibility. At 82 percent, customer requirements are now the strongest driver for sustainable action, followed by intrinsic motivation (81 percent), clear work instructions (77 percent) or legal regulations (75 percent). However, implementation still requires support. Among other things, a risk assessment and a corresponding framework for purchasing must be defined via strategic purchasing. For example, those responsible in operational procurement can be given concrete support in implementing sustainability concepts that appear abstract at first glance in their processes, for example through further training offers.

For more information about digital procurement tools write on our mail at: This email address is being protected from spambots. You need JavaScript enabled to view it.

 

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