A few years ago, Hugo Evans and Stephen Easton from A.T. Kearney predicted, “Digital technologies are on pace to automate most routine consulting procurement processes within three to five years.” They were absolutely right in their visualization of the future. Moreover, the Covid-19 pandemic accelerated the pace of development of digital procurement.
Thanks to these adoptions, Digital Procurement is a truly dynamic category today, with Cloud Technology, Cognitive Procurement, Blockchain, and many new digital trends transforming the way how Procurement is organized and executed.
Let’s take a closer look at some of the exciting new trends in this space and try to figure out where they can take us in the future. But first. Let’s take a look at where digital procurement exactly stands today for the consulting category.
Top 6 Tech Trends Revolutionizing Digital Procurement That Demand Your Attention
The 6 tech trends that are revolutionizing digital procurement and that require your attention are as follows:
1 – Simplicity
While there are new complex technologies and complex benchmarks, the goal is to simplify processes and improve overall efficiency. Streaming cash flow, business operations, customer services, and much more.
2 – Nearshoring
Reducing costs has a new destination now. Offshore operations might be becoming a term of the past. Nearshoring is a new procurement trend giving companies a chance to exploit domestic opportunities and have more control of consulting procurement and supply chain functions.
3 – Blockchain
Data blockchain is gaining more and more power as supply chain, and consulting procurement decisions are all based on data. This revolutionary technology will change business-to-business transactions and offer a high level of efficiency with cryptography, eliminating the role of the central trust authority in the process.
4 – Cloud Technology and IoT
Cloud-based technologies and IoT are helping erase the physical boundaries and create a centralized system increasing the efficiency and productivity of the supply chain and procurement function.
This consulting procurement trend is expected to give rise to the popularity of SaaS applications and encourage even small businesses to benefit from that.
5 – Procurement and Supply Chain Collaboration
Collaboration as a consulting procurement trend is growing across all industries. As a part of their strategic move, businesses focus on collaboration between business functions, procurement and supply chain.
6 – Social Responsibility
Corporate Social Responsibility is a hot trend that is gaining momentum. Businesses are now expected to roll out programs that include sustainability practices. Savvy and well-informed consumers today prefer brands that are environmentally and socially conscious.
Exploring Transformative Shifts in the Consulting Procurement Space
What is happening in the realm of consulting procurement? How are digital procurement trends shaping the industry? How are companies acquiring consulting services in today’s evolving landscape?
Although companies are, in general, getting better at purchasing, consulting procurement still is a labor-intensive activity with lots of data and paperwork to handle.
However, things are changing, albeit slowly. As the digital transformation of procurement as a whole is gearing up across industries, the consulting industry, too, is catching up with the trends.
Several technologies are being adopted to automate most routine procurement processes within the next few years.
The procurement function has already started to take a shift from tactical to strategic function, and digitalization could further help to project procurement at the C-suite table.
How to Unlock Digital’s Potentials in Consulting Procurement?
Let’s start by getting clear on what the digital transformation entails. We tend to use the terms digitization, digitalization, and digital transformation interchangeably when they have different meanings, particularly for Procurement.
Digitalization is the process of employing digital technologies and information to transform business operations. Automation plays a big part in digitalization, where some elements of the processes are now done automatically. The processes are digitalized.
Digital Transformation is the overall strategy of a company that is embracing digital and leading as a consequence of both digitization and digitalization projects.
The end-to-end procurement process can be divided into several activities, such as Spend Analysis, Procure-to-Pay or Financial Performance, Contract Lifecycle Management, and more.
Depending on the category and the Company’s ways of working, going digital in these activities can open up multiple savings channels. Here is how to embrace digital for procurement functions.
Do you know how much you are spending on consulting? For the Consulting Category, the secret is to be able to cross both the financial and the performance metrics at the project level.
Many digital procurement platforms are now enabling a fine analysis of procurement and process data. They turn your raw data into actionable insights.
Most platforms allow you to slice and dice your data per region, category, supplier, and organization.
Supplier Relationship Management for Consulting is crucial. Linking Consulting Performance to your Preferred Supplier List and your Supplier Relationship Management is the first step to Category Management.
Supplier Management systems offer the possibility to onboard your suppliers, identify and manage your preferred suppliers, mitigate supplier risk, and implement continuous improvement.
The SRM is often included in Procure-to-Pay and Source-to-Pay suites.
Negotiations & Decision
Negotiations & Decision systems are rarely stand-alone solutions but rather integrated with Strategic Sourcing or Source-to-Pay Solutions.
They help enable bidding through real-time auctions or reverse auctions to stimulate competition among your providers.
Contract Management systems integrate contracts into the spend management process. They allow buyers to generate contracts from templates, automatically populate supplier information, and share documents using Word or DocuSign tools.
They provide visibility and history during the life of a contract and manage expiration alerts. They are often included in Procure-to-Pay or Source-to-Pay suites.
Using a Procure-to-Pay solution for the Consulting Category can be instrumental in centralizing spend management and implementing demand management.
Workflow management will have to be customized to follow your organizational structure.
Procure-to-Pay solutions are all-in-one solutions merging Procurement, Invoicing, and Payment as well as Cash Management in one integrated platform.
They usually include a catalog of products or suppliers, purchase orders, and requisition management. They also manage the approval workflow and discount programs.
Tracking and Reporting Savings is important for Procurement Teams but can be tricky when it comes to consulting. You want the best consultant at a competitive price, but most of the benefits are in the value you will get from the project itself.
Financial Savings Management Software and Financial Performance Solutions replace the manual process of spreadsheet inputting, project tracking, and savings estimation linked with the activity of procurement teams.
It captures savings from inception to confirmation and allows real-time forecasting and reporting.
One Caveat in the End:
As a rule of thumb, when the activities have low- to medium-value potentials, you should take advantage of established generalist solutions.
Conversely, for the activities driving high-value savings, such as Category Planning, RFP Management, or Supplier Performance, you may want to explore category-specific solutions.
When the manual activities of consulting procurement, like contract management or RFP process management, are automated with digital procurement solutions, the core business for procurement can revolve around strategic sourcing and supplier relationship management.
As a result, the Procurement executives will focus primarily on bringing more value to their daily interaction with internal clients and suppliers and thus develop a closer collaboration.
digital procurement digital procurement digital procurement digital procurement digital procurement digital procurement digital procurement digital procurement digital procurement
How Consource Can Help?
Consource an exclusively designed platform for the consulting category, provides procurement executives with a Digital Procurement Platform to unlock the full potential of organizations’ consulting investments. It allows companies to harness the power of digital to treat consulting as a strategic investment.