The prestige of workers in the e-procurement industry has been tied to the state of the economy. During slumps, procurement was managed by clerks. When the economy was robust, procurement became vital to strategy and was managed by well-educated professionals. Today an e-procurement strategy is more vital than ever and believed to be a solution to weathering downturns.
Industries Adopting E-procurement
40% of demand for e-procurement comes from government organisations while 10% comes from manufacturing industries, 12% from hospitality businesses, 4% from IT and software companies, 3% from e-commerce companies, 20% from banking entities, 3% from FMCG players, 3% from the telecom industry, 4% from the healthcare sector, and 1% from other industries.
E-procurement in Next 5 Years
Over the next 5 years, e-procurement will present numerous opportunities to businesses. Businesses that exploit such opportunities will add value to their models. Procurement will deeply influence organization strategy and be a source of competitive advantage. Procurement managers will not only be accountable for lower costs but also innovation, agility, and supply certainty.
Technologies like robotics, AI, and blockchain will make procurement more intelligent, efficient and transform it from a tactical differentiator to a strategic one. Data will be continuously cleansed and improved using machine learning techniques. This will leverage process outcomes and automatically identify and cure data anomalies in systems. Manual processes for high-volume and regular procurement tasks will be eliminated. Procurement will become seamless end-to-end.
Procurement will happen over hyper-connected ecosystems which will become the standard. The process from sourcing to settlement will be unified and provide business agility and speed.
New Technologies Impacting E-procurement
Technology and digitalization are dramatically changing customer experiences and expectations. Procurement has evolved from an operative, administrative system to a strategic function. Redundant procurement tasks are being automated and C-suite leaders are being involved in decision making. Digital technologies are leading to product innovations that lead to superior market visibility and higher profits.
Last year organizations adopted cognitive procurement technologies like big data analytics, machine learning, natural language processing, artificial intelligence, and robotic process automation. In 2019 these technologies are being adopted more aggressively. Blockchain is being used to transform procurement by improving contract management, tracking, and payment processing.
Before e-procurement organizations communicated offline. Today e-procurement lets organizations work in a coordinated environment. Organizations today are likely to communicate in real-time using online platforms. Organizations use AI to source strategically by predicting demand and during advanced negotiation techniques to optimise their search for suppliers.
Businesses and government organizations have realised that data is the fuel that provides deep insights. It helps make decisions that drive profits and ensure growth. Companies use emerging technologies that convert data into useful information. Such information improves purchasing power, spending management, and mitigates risk.