10 game-changing procurement trends for finance teams
Learn how organizations can prepare for powerful economic headwinds.
With the pandemic safely in the rearview mirror for most businesses, 2023 will be a time for organizations to prepare themselves for powerful economic headwinds. SaaS remains one of the most cost-effective means for teams to innovate and modernize their operations. Yet, for so many enterprise organizations, the vendor procurement process remains overly complex, inefficient, misaligned, and painstakingly slow. This results in meaningless red tape—and delays across all functions, continually impeding growth and ROI.
In 2023, inefficiency and delay will be luxuries that no company can afford. In this post, we share 10 business realities that make procurement automation a necessity—in the new year and beyond.
- Self-service and usability are already the new world order.
SaaS companies whose products disregard low-tech users are likely doomed to fail.
This may seem like a dire statement. And yet, in the world of procurement, we’ve seen a steady increase in purchase request volume and the complexity of approval workflows. To initiate and drive purchase requests, companies need solutions their employees feel confident using. Since key stakeholders within procurement are often non-technical (e.g., your finance, accounting, and procurement teams), it’s best if these solutions can incorporate consumer-grade UX/UI—and a complete lack of coding. Otherwise, an overly complicated procurement system—or one that leaves gaps in the workflow—will continue to result in an expensive, unhelpful backlog.
When companies use substandard procurement systems, we’ve actually seen some employees 'go rogue,' introducing their own software outside the proper channels, which carries significant risk. We’d caution against this trend.
- Tech companies will need to wildly prioritize profitable growth.
In the wake of heavy inflation, lingering shortages, and rising interest rates, economic uncertainty primes tech companies to re-prioritize, putting cost-cutting measures first. The emphasis will be on increasing productivity, so enterprises can continue to carve out reasonable margins and move forward.
As with any period of economic challenge, the market will reward the companies that grow most efficiently. Many companies will struggle to be lean, but those looking at automation can put themselves in a winning position.
- Automation will be the hallmark of procurement.
Manual, time-intensive processes will continue to overload procurement teams, particularly as purchasing becomes increasingly decentralized. Without automation, the burden on procurement teams to push through massive purchase requests makes little sense. Slow and inefficient manual processes will continue to generate significant backlogs. Automation sidesteps these entirely.
Intake-to-procure solutions will be critical for speedy purchase requests and improve end-to-end visibility. In 2023, expect procurement teams seeking to optimize workflows and scale more efficiently to lean into automation heavily.
- Widespread adoption of SaaS applications will generate the need for a management tech stack.
“Having the right software in place – and the right platform to manage that software – becomes foundational for the digital transformation of every business,” predicts Lu Cheng, Zip co-founder and CTO.
He’s right. Automation modernizes organizations—and SaaS proliferation represents a particular breaking point. Technology and a new way of thinking are necessary to track and manage software company-wide. There will be a sharp increase in new software solutions for managing the proliferation of SaaS applications. These new platforms will integrate applications in contract lifecycle management (CLM), governance, risk and compliance (GRC), procure-to-pay (P2P), and third-party risk assessment (TPRM).
- Enterprise fintech will finally get an overhaul.
Over the last decade, fintech has been the shining star, providing innovation for B2C transactions. However, a revolution is underway to offer the characteristics of B2C fintech to the enterprise, creating seamless, easy-to-use product experiences. There will be considerable advancements in enterprise fintech technologies in 2023.
Expect a significant—and much-needed—disruption in accounts payable, global payments, virtual cards, and more. We are particularly excited about what this mentality shift will bring to the world of procurement automation.
- Economic uncertainty will make no-code tools an enterprise necessity.
In today's rapidly changing environment, enterprises can no longer wait months for IT and engineering to update their systems. A well-built no-code platform allows organizations to quickly build applications that integrate seamlessly with existing systems and solve a broader range of use cases—without the involvement of developers or IT.
Easy-to-configure tools ensure faster implementation and time to value. Businesses will look to no-code platforms prioritizing stability, ease of use, and scalability.
- Businesses will strike a balance between domain-specific and general-purpose automation tools.
Historically, there’s been a long-standing battle among automation vendors over implementing domain-specific versus general-purpose automation. General purpose tools—ServiceNow, Zapier, and Workato—have been viewed as the one-size-fits-all solution to any automation woe. But in recent years, businesses have relied on domain-specific automation—such as Okta in identity management, Harness in DevOps, or Ironclad in contract lifecycle management—for more complex scenarios.
After years of trial and error, enterprises are poised to strike a balance in 2023. General-purpose automation will remain strong in organizations that heavily centralize and standardize on one enterprise-wide platform with the IT resources to customize for multiple use cases. Those seeking to optimize B2B purchasing processes will favor domain-specific systems.
With a clear line between the two technologies, enterprises can apply both technologies more intelligently to streamline processes.
- CLOs will turn to Legal Ops to streamline efficiencies.
According to George Karamanos, Zip’s Chief Legal Officer, “We will see increased adoption of legal operations (Legal Ops) frameworks by more chief legal officers (CLOs) across industries.”
During the pandemic, CLOs played a more significant role in advising on risk management and business operations matters amid the new world order. With a more prominent seat at the table, CLOs will rely on operations-driven methodologies to confront their expanded role in business operations.
In 2023, expect more CLOs to employ LegalOps to streamline efficiencies across legal teams in the same way that DevOps, MarketingOps, and RevOps have done in their sectors.
- Procurement tech will be critical for reducing spend and managing compliance.
As companies tighten belts in response to economic uncertainty, many will turn to procurement technology and SaaS management tools to gain better insight into software and services spending. Procurement tech allows better visibility into purchasing approvals and offers compliance management in legal, data privacy, and information security.
With procurement technology, enterprises have better visibility into purchasing approvals, reduce rogue spending, and ensure compliance with data privacy laws and IT protocols.
- There will be greater collaboration between procurement and legal teams.
Companies will continue to turn to third-party software and services vendors, increasing the need for collaboration between legal and procurement teams. In some organizations, procurement teams will report directly to chief legal officers—which will significantly reduce internal friction and create stronger cohesion between these two vital functions.
Optimizing efficiencies will be essential to cross-functional collaboration. Effective procurement in 2023 will rely heavily on collaboration and the ability to leverage technology to advance company goals and objectives. Procure-to-pay automation can pave the way.
Contact us to learn more about how to automate your procurement process and prepare for the year ahead.
