Navigating procurement excellence: Key trends for 2024

The world of procurement is undergoing a seismic shift in 2024. Procurement leaders, often referred to as Chief Procurement Officers (CPOs), are facing an uphill battle to save money while simultaneously achieving short- and long-term corporate goals. This challenging feat is exacerbated by the growing importance of ESG (Environmental, Social, and Governance) principles and resilience strategies. Amidst these complexities, the procurement industry is being reshaped by digital trends.

In this comprehensive blog post, we’ll take a deep dive into the latest digital trends influencing the procurement industry and explore how embracing these changes can lead to excellence.

Advancing strategic procurement with digital tools

Procurement leaders have identified three core strategic priorities for 2024: cost savings, supply resilience, and sustainability. Achieving these objectives demands a newfound level of control over company spending, allowing procurement teams to exert greater influence over sourcing and supplier selection decisions. The key is increasing spend under management and expanding the share of spend covered by category strategies. This move empowers procurement teams to operate more efficiently and effectively.

A recent report, the Procurement Leaders’ Strategic Planning Guide 2024, indicates that organizations excelling in this area achieve not only higher savings but also outperform their peers in terms of procurement Return on Investment (ROI) and operating costs. This demonstrates their ability to deliver superior commercial value while simultaneously improving efficiency.

Leveraging centralized resources for success

Team and talent management are at the heart of achieving procurement’s 2024 objectives. To meet new procurement priorities, teams are becoming increasingly specialized. This specialization includes roles in data and digital, risk management, and ESG. An ongoing shift in procurement teams seen in previous years is now being accentuated.

The report suggests that organizations allocating more than 15% of their headcount to shared services and centers of excellence (COEs) outperform their counterparts in terms of cost savings and procurement ROI. This approach streamlines processes and enhances performance.

Bridging the digital divide in procurement

Despite the widespread adoption of digital transformation, the procurement landscape is still plagued by various challenges. Fragmented processes, poor data management, inefficient supplier management, and lack of visibility into spend data continue to hinder progress. To overcome these barriers, procurement teams need to become more agile, efficient, and responsive to market changes through digital transformation.

Digitalization offers several benefits, including:

1. Automating procurement processes: Eliminating manual tasks such as supplier onboarding, contract management, and purchase order processing. This reduces errors and frees up procurement professionals’ time for strategic tasks.
2. Improving data management: Providing real-time visibility into spend data allows procurement teams to identify trends, reduce costs, and negotiate better contracts with suppliers. Big data analytics and AI enable data-driven decision-making.
3. Efficient supplier management: Real-time insights into supplier performance, risk management, and compliance facilitate better supplier relationship management, optimization, and risk reduction.

Procurement automation and resilience

Digital transformation not only streamlines procurement processes but also bolsters supply chain resilience. By centralizing systems, organizations gain more control, reduce process friction, improve agility, and enhance visibility. Modernizing inefficient processes and enhancing analytics provide organizations with the tools to manage supply chains effectively even during times of turmoil. The greatest value, however, lies in enabling teams to accomplish more with fewer resources without sacrificing speed or precision.

Unlocking the hidden value of digital procurement

The journey to digital procurement begins with a clear roadmap that includes steps, timelines, risk planning, and collaboration. Before proceeding, organizations must identify bottlenecks in their existing procurement processes. Assessing the technology ecosystem is crucial, as many organizations struggle with data silos and fragmented processes. Low-code automation solutions can bridge these gaps and provide a unified tech stack.

Digital procurement goals should be closely aligned with overall business objectives, emphasizing cost-effectiveness to overcome resistance. Delaying the shift to digital procurement is risky and expensive, as it hampers the ability to respond to disruptions in real-time. In the long run, digital procurement enables better supply chain management and cost-saving opportunities across the organization, positioning procurement as a strategic partner.

OnScreen Guidance’s role in procurement excellence

Acknowledging the rapidly evolving landscape of the procurement industry, OnScreen Guidance wholeheartedly embraces the pivotal role that digital tools occupy within this domain. Our digital adoption platform transcends the traditional concept of a mere support system; it assumes the role of your strategic partner, facilitating your journey through the intricacies of digital transformation.

An impressive feature of OnScreen Guidance is its capability to capture and share new procurement processes as in-app guides. These guides are not your typical static documents; they become dynamic companions, providing real-time assistance to users as they navigate procurement applications and systems.

This dynamic functionality ensures that users can adapt promptly, minimize errors, and maximize operational efficiency while engaging with the ever-evolving landscape of procurement processes. This transformative capability underscores OnScreen Guidance’s commitment to empowering you as you confidently navigate the future of procurement, offering firsthand experience of the remarkable transformation it brings to your procurement practices.

Now, how does this tie back to the claims made in this blog post about the importance of digital tools in procurement?

1. Bridging the digital divide: OnScreen Guidance empowers you to document and communicate changes in procurement processes swiftly and effectively. Process documentation changes can be made in a matter of minutes, not days or weeks. This agility ensures that your procurement team is always up to date with the latest processes, minimizing errors and delays.
2. Centralized control: With OnScreen Guidance, you maintain centralized control over process changes. This feature is invaluable when procurement teams must adapt swiftly to shifting market conditions, regulatory changes, or supply chain disruptions. Procurement leaders can orchestrate and communicate changes efficiently to the relevant user groups.
3. Enhancing efficiency: The ability to publish annotated walkthroughs directly within procurement applications/systems ensures that users have immediate access to guidance. This significantly reduces the learning curve, increases user proficiency, and maximizes the efficiency of procurement processes.

OnScreen Guidance goes beyond being a mere tool; it becomes a trusted ally in your journey towards procurement excellence. By simplifying the process of documenting, communicating, and implementing changes, we provide your procurement team with the means to react swiftly, adapt to emerging challenges, and enhance operational efficiency. In a rapidly changing procurement landscape where agility is paramount, OnScreen Guidance offers a practical solution to empower your team. Embrace the future of procurement with OnScreen Guidance and experience firsthand the positive transformation it brings.

FAQs

What are the key challenges that procurement leaders are facing in 2024?
Procurement leaders in 2024 are grappling with the dual challenge of saving money while achieving corporate goals, with added complexities such as the growing importance of ESG principles and resilience strategies.

How can digital tools help in advancing strategic procurement?
Digital tools empower procurement teams to gain control over spending, increase efficiency, and influence sourcing and supplier selection decisions. This can lead to cost savings, supply resilience, and sustainability.

What role does OnScreen Guidance play in improving procurement excellence?
Learning Pool’s digital adoption platform, OnScreen Guidance, provides real-time guidance to streamline procurement processes, reduce errors, and enhance user proficiency. It empowers procurement teams to adapt swiftly and enhance operational efficiency.

How does digitalization impact supplier management in procurement?
Digitalization provides real-time insights into supplier performance, risk management, and compliance, facilitating better supplier relationship management, optimization, and risk reduction.

What benefits does centralization offer in the context of procurement?
Centralization of systems in procurement enhances control, reduces friction, improves agility, and provides visibility. This empowers teams to accomplish more with fewer resources without sacrificing speed or precision.

OnScreen Guidance makes it simple to train your people to use the software your business runs on. Learn more.