In the recent 2019 CPO Study produced by WBR Insights, three major findings were realized regarding the challenges facing today’s procurement professionals. First, cost-reduction is no longer the only metric on which to judge procurement ROI. Second, digital transformation is inevitable and necessary. Third, winning buy-in from stakeholders and overcoming rebuttals are major obstacles to digital transformation. Fortunately, a supply chain management SaaS, like Avetta, can resolve each of these procurement concerns.
New Ways to Measure the Value of Procurement
In previous years, the value of procurement processes and decisions was based solely on the cost of goods sold and the reduction of third-party budgets. However, according to the survey, just under half of respondents listed different metrics used to assess value. These metrics included ROI on functional cost vs. P&L savings, EBITDA reduction, and SG&A contribution. The key takeaway is that a multidimensional view reveals the many ways procurement can affect an organization’s overall financial health.
Avetta increases the value of procurement further in three distinct ways. First, the procurement SaaS platform and Avetta’s expert team supports pre-qualification of contracts during the RFP/RFI/RFQ process. Second, document management is maintained in the cloud, making onboarding of new and existing suppliers quick and easy. Third, Avetta helps take insurance risk out of the equation by removing the burden of tracking Certificates of Insurance; suppliers simply upload their documents, and Avetta insurance professionals verify that client-defined limits have been met.
Digital Transformation is the Future of Procurement
The survey also revealed that 84% of respondents are sourcing digital transformation solutions, integrating them, or have already completed their transformation. According to Mudit Kumar, Senior Director at GEP Worldwide, “What we are seeing now is that technology, especially emerging technology, is becoming a central part of the procurement professional’s agenda. They are taking personal interest, investing more time in it, and driving some of these programs with personal accountability, which I think is very important.”
Digital transformation leverages digital capabilities to improve efficiency in processes, products, and assets which can enhance customer value and manage risk. Avetta’s SaaS platform augments any organization’s digital transformation in the following ways. Clients get instant access to prequalification data for the entire supply chain from any web-enabled device. Additionally, by allowing clients to define requirements for suppliers ahead of time, the Avetta platform digitally prevents unqualified suppliers from slowing the procurement process down.
Overcoming Internal Resistance to New Procurement Processes
One of the challenges facing procurement professionals is the difficulty of bringing new technologies into pre-existing environments. Avetta understands that procurement teams are often required to work with multiple software platforms including ERP, vendor management, and purchasing systems. That’s why Avetta offers an easy-to-use API that simplifies communication across systems, giving different teams more insight to make better decisions. Supplier data such as contact information, account status, flag status, audit data, and more can be quickly referenced from the Avetta database and displayed in multiple software applications. If you’re a procurement professional, see how Avetta’s Procurement Services can be the catalyst to your procurement digital transformation.