IT Procurement – The Ultimate Guide For 2021
There is big news for procurement software this year 2021. While 2020 was full of uncertainty for automated processes for sourcing and procurement, things will somewhat change for the better. In this article, we are going to explore just that.
We will learn why procurement software spells “adaptability” for this year and we will also take a look at how the professional procurement managers handle their IT procurement.
After this article, you will understand why IT procurement is important for the actual processes.
What is IT Procurement?
IT procurement is the process of using automated software for procurement purposes. Most companies are now using automated software as a means of relegating the cumbersome task of data management and analysis. Other tasks, such as contract management, the analysis of data coming from sourcing vendors, as well as creating bids and RFQs are just some of the menial but important tasks that IT procurement does.
With IT procurement, the important tasks that need focus and superior decision-making can now be assigned to all important members of the procurement team, since the data analysis can be left to the program.
Why is IT Procurement Important?
The problem with most procurement processes is that it will sometimes take you all day just to complete every step and process. Companies that still rely on paper are spending hours upon hours listing down every important information gathered from the series of talks with the suppliers. Not to mention the long list of paperwork that needs completing.
Finally, you have the need to get your superiors to sign your request for quotations and requests for information. Imagine how many days you have to wait or line up in his/her office all because your procurement process won’t move unless you get those signatures.
Imagine all those tasks done with just the simple click of a button.
Of course, these programs are only assisting the company with more than half of the actual procurement process. In the end, the procurement manager is still in charge of how the whole procurement system should go. For those who are looking to improve their skills in procurement and sourcing, our Negotiation Gamechanger Course is available for interested individuals to check. Our course is designed to help procurement managers and negotiators in becoming the very best in their craft, so feel free to check it out!
The reasons above are just some of the examples of the advantage of investing in IT procurement. The programs created for the IT procurement system are built to automate most procurement processes. The processes include sourcing, RFQ, RFI, and others.
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Important Key Trends of IT Procurement Software
Technology is not constant. It is always evolving, always changing. And so does IT procurement. Since it is a piece of software that is always updated to keep up with the latest changes in sourcing and procurement, it is only right that you, the procurement manager, should also have an idea of its latest key trends.
There are several factors that procurement managers may have to consider while they are shopping for which IT procurement software to get. Here are some of those factors:
- The wide use of AI or artificial intelligence in procurement is creating new opportunities to reduce costs and enhance efficiency. – This means new procurement software means new technologies created to give procurement managers a lot of new options to choose from. Procurement software platforms can now use machine learning algorithms to organize unstructured spending, costs, contract, and supplier data. There is even new procurement software that allows the use of chatbots. These chatbots can now answer inquiries coming from potential suppliers.
- Shifting from an on-premise model to software that can access the cloud has a lot of potential benefits for procurement teams. However, always choose a cloud-native solution instead of a procurement program that is a cloud-based solution. A cloud-native model allows a business to unify a huge range of relevant applications under a single platform.
- A transition from the old monolithic architecture to the updated microservices architecture is giving procurement more focus on other strategic tasks. Thus, the company can deliver more value for the business. Microservices allow developers to build and improve the features of the procurement program. Developers can easily tap into whichever microservice feature the company needs without having to worry about difficult integrations.
- Enterprises can now access new supply channels thanks to crowdsourcing. For those who are not familiar with the term, crowdsourcing means signing up a digital platform provider to getting specific deliverables and outcomes. The members of the crow can then start to work on realizing the said outcomes.
- RPA or Robotic Process Automation is being adopted in procurement at a rapid rate. And it’s not that surprising, since most businesses and industries all over the world are either run by actual robots programmed by AI or specific programs called robots that are by automated programming. In any case, Robotic Process Automation is software that learns and recognizes patterns, which then performs rule-based tasks. The RPA is a big help for any procurement team, as the mundane and repetitive tasks are assigned to the said programming to help the team become more efficient, as the more important tasks are assigned to actual people instead.
- Blockchain is efficiently changing the meaning of digital transactions and the source-to-pay process. Blockchain in procurement helps create digital transaction ledgers with the use of its cryptologic data structure. The said ledgers can help verify and validate P2P transactions. The program can also simplify purchase order management, process invoices, order validation, and multi-way matching.
The IT Procurement Strategy – What Usually Works?
Not to confuse you, but the IT procurement strategy works like the usual procurement strategy. Perhaps the only difference is that the procurement manager uses procurement software instead of the traditional pen-and-paper process.
Let’s face it; the bigger the procurement, the more data and research you’re going to put into the whole process. And with more data needed and gathered, you are going to need something big to store all that data. And we’re not talking about data written on paper. That would be extremely inefficient.
These companies are using or offering procurement IT solutions for other businesses:
- Inventory Optimization Solutions
- Coupa Software
Procurement managers will find it useful to get help from these companies, as they can make the whole procurement process easier. They’ll assist you in managing automated queries, using data for sourcing, and others.
With the use of procurement software, the procurement manager and his/her team can use it to analyze data, do market research, conduct sourcing among potential suppliers, and even process requests for information and requests for quotations. The latest IT procurement software allows the program itself to track invoices, create records for suppliers that won bids, and other important procurement functions.
To make things as simple as possible, you can do the following for your own IT procurement strategy:
- Create a simplified purchasing chain – Your procurement process should not be too difficult to understand. The simpler it is, the better your procurement software can create the necessary adjustments for each process.
- Managing supplier risk – The more aggressive your procurement process is, the more risk it’ll draw in. Make sure that your procurement software can be managed to handle risk during the whole procurement process.
- Consolidating the supplier database – Your procurement software should be at the center in consolidating all supplier databases. It should have all records of important transactions created throughout the procurement process. This way, you don’t have to look or ask your team for specific invoices.
- Building predictive analytics – The beauty of automated systems is that they can sometimes predict the flow of a process through analysis. The more advanced procurement software can even create the flow for you.
- Incorporating the department into the global system – With the help of your procurement software, your procurement team can also check for information regarding the procurement process into the global system.
What is IT procurement?
IT procurement is the use of procurement programs to help in creating the procurement process.
How to do IT procurement?
It’s easy to do IT procurement. All you have to do is buy or create your procurement program and integrate it into your procurement process.
How is IT procurement different from normal procurement?
IT procurement is all about integrating a procurement software or program into your procurement process. Normal procurement is just following the flow of a procurement process.
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