New processes needed

Victor Kushch
CTO
Fairmarkit
5-minute read

For many years, the internal processes for making purchases were fairly straightforward. An employee created a purchase form which was submitted to the procurement team and finance department. After receiving approval they could purchase what they had requested from any supplier and would submit the invoice to the department.

Despite being an easy process in theory, decades of paper invoices and lack of oversite in addition to budgetary inconsistencies have created many systemic issues for procurement organizations. Spend has increased greatly and it is not uncommon for companies to have vendors registered with no actual history of purchases.

Fortunately advances in technology are moving procurement into a new era. Cloud technology, IoT, SaaS, AI and other technologies allow companies to increase their productivity and ultimately reduce spend. But despite these advances, many procurement offices are still utilizing the same outdated processes. With increased demand and headcount, the bar has been raised – organizations expect to receive their goods and services faster than ever. Adding insult to injury, software providers automated processes are often developed based on helping a company increase demand for their offering versus streamlining the supply for the business, which can create more productivity issues.

Many of the technological advances that have happened in the last ten years have occurred at a rapid rate but with this change must come an overhaul of processes. Procurement has reached the point where open conversations about where new technologies fit into current systems must be welcome. Procurement needs to reinvent their internal procurement strategy, processes and functions.

By creating straightforward, predefined processes that take into account preferred vendors, product, budget and supply; organizations will be able to maximize new technologies to benefit the bottom line and efficiency.

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