Procurement technology to date has been populated by big-budget systems and suites that cause more problems than they fix. It’s an unpleasant workflow for users of all backgrounds, and with inaccessible and rigid user interfaces, it still does not give users a developed and realized view into their spend culture.
These systems lack specifically in requesting non-catalog items from vendors, leveraging lowest prices to reduce suppliers’ bottom lines, a lack of trends and freight accounting within purchasing, and very stiff permissions controls among other things. With all of these setbacks and hindrances being considered, the future of digital procurement technology has shown some real promise in the last few years.
To forecast where the future of digital procurement is headed in 2019, we must evaluate the innovations of industry leaders and the trends that are sure to follow. A new trajectory focused on usability, anytime access with the help of mobile portals, stacking and implementing microservices to work fluidly with each other, and new frontiers in automation are not only reason to celebrate procurement tech finally catching up, but perhaps advances that will change the way we spend and scale organizations forever.
Putting the Power in The Hands of The User
For decades, procurement and financial technology’s backbone was fielding and organizing a plethora of spreadsheets or paper. In recent years, spreadsheets and paper purchasing processes have slowly but surely begun to fade out. According to APQC’s Procurement Blueprint For Success Report, only 80 percent of companies have adopted electronic purchasing processes. We’re currently in a phase where the most cutting-edge use of spreadsheets is to organize and check information in CSV format to be readable in other APIs and microservices, while most companies are still going through the motions of duplicate inputs and manually organizing them to be printed physically.
The most powerful procurement tools on the market today are ones that have this backwards compatibility with spreadsheets but also are crafting a world without them entirely.
Mobile Will Be King
There are very few procurement tools that allow mobile access in the marketplace currently, but we forecast that this will become a big trend in 2019 and beyond. The number of mobile app downloads have grown from 178 billion in 2017 to 205 billion in 2018. Early adopters like Procurify have fully realized and function mobile applications that allow you to manage purchase requests, approvals, budgets and more anywhere at any time.
What this means for procurement cannot be understated. Not only do you not have to be tethered to your desk to make big decisions about your spend, but you can actually do certain things more efficiently on your phone than anywhere else! Being able to instantly upload and synchronize invoices by snapping them with your mobile camera is uncharted territory, and the upside is huge. The feature pipeline for mobile procurement has an unbelievably high ceiling, and we’re only just getting a first taste of what is in store
Microservices Will Kill All-In-One Solutions
It is safe to say the age of all-in-one suites are behind us. The mass growth of new financial technology platforms might cause concern for those that only see saturation and too many options, but this would only be concerning if these companies were in direct competition with each other. The truth is, most new and successful financial technology platforms and solving different problems, and they also work effortlessly with each other.
What I am describing is none other than the API and microservice revolution. These services that are products of cloud technology support application programming interfaces, or APIs. These microservices allow effortless integrations and connections within each other, making workflows unique and seamless. In this new era of technology, there is a consistent exchange of information across various platforms with no custom code needed.
This positions traditional systems in a space where they must evolve or die. Procure-to-pay suites for example will likely not fold and close up shop but will also begin to offer such implementations and invite themselves to this new flexible and interactive ecosystem. AT Kearney’s study on the new digital procurement technologies explains further, adding, “This [new] architecture evens the playing field. The suites will have to compete on a best-of-breed basis instead of relying on arcane, non-value-add features such as ERP integration.”
The Evolution of Automation
While we haven’t reached the glorious pinnacle of procurement being fully automated through AI technologies, we can surely see the horizon. It is safe to say that we are in an assistive and supplemental state when it comes to the relationship between automation and procurement. Features revolving around automated buying, AI assistants that source vendors, and intelligent chatbots that provide inquirers with instantaneous insights and support are the measures of this climate, but new and advanced tools are also beginning to bloom and develop. AT Kearney sees a future for supplier-risk that fuses AI with supplier-risk monitoring and mitigate risk altogether without any human input.
AT Kearney’s study points to a more specific example, explaining that “If the system is monitoring a supply base and a particular supplier becomes embroiled in a bribery scandal on the other side of the world, the system can automatically score the initial risk, monitor it, adjust the risk score as more information comes in, and pull up all contracts and spend associated with that supplier so that the company can make decisions should the scandal grow.”
Depending on who you ask, the current state of blockchain is either intensely tantalizing or severely frustrating. What isn’t up for debate is that the technology is certainly in its infancy, and that despite its controversies and shortcomings, it still has some serious prospects.
Smart contracts specifically are a concept that could completely revolutionize how we spend. To put it simply, smart contracts mean that risk can be mitigated and completely avoided when it comes to spending money in the wrong places and can be programmed and fine-tuned to execute and monitor supplier relationships, reconciling terms and dispensing payment once certain automated checkpoints are reached or achieved. Not only does this streamline the entire cycle of supply-chain management, but it also redefines the P2P process entirely.