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Procurement orchestration 101: A guide for procurement leaders

Procurement orchestration 101: A guide for procurement leaders

Procurement processes can often feel overly complex. When this happens, employees may find themselves dismissing the formal purchasing workflow, either because they’re either unsure how to properly process intake requests, or they simply don’t even know where to begin. 

Perhaps they wish to sidestep the long cycle times, or opaque approval processes, and just make their purchases independently—forcing procurement departments to chase down receipts and manage rogue spend.

Procurement orchestration solves these issues by facilitating an integrated, collaborative layer across all existing tools and systems, ensuring financial and procurement leaders maintain full transparency and control at every stage of the procurement process.

In this guide, you’ll learn:

  • A definition of procurement orchestration
  • Why businesses are looking at procurement orchestration layers today
  • The key components and best practices of procurement orchestration
  • Challenges associated with implementing procurement orchestration
  • How businesses can use a Procurement Orchestration Platform to streamline intake and approval processes across current procurement systems like ERP and P2P (e.g., SAP Ariba)

Procurement orchestration definition

Procurement orchestration involves the strategic integration of all processes leading into an organization’s procurement strategy, offering a holistic view above individual process levels. This includes integrating processes that may reside in different systems or departments.

It is a powerful, broad view, encompassing tools and strategies that help maximize spend visibility and augment efficiency of procurement teams. ‍Increasingly, businesses are seeking to integrate their existing tools and systems by applying a procurement orchestration layer to tie purchasing processes together.

Think about procurement orchestration as a collaboration layer for your end-to-end purchasing tech stack. 

You may already be using an ERP, a Procure-to-Pay (P2P) system, or other best-of-breed solutions for Contract Lifecycle Management (CLM) or Supplier Information Management (SIM). Increasingly, companies are opting for an Intake-to-Procure solution, allowing for a procurement ‘start button’ for employees to begin any request—be it a new purchase, a new contract, or onboarding a new vendor.

But procurement orchestration takes it further, covering the entire process from Intake-to-Pay. When the tools, people, and processes are unified, they are all ‘orchestrated’ together, working both in rhythm and in harmony.

Because procurement orchestration allows for fully integrated, real-time stakeholder collaboration across tools and processes, it solves the issues of fragmented and manual processes caused by outdated legacy solutions.

Download our free guide ‘The Executive Guide to Procurement Orchestration’ for a deeper look at how procurement orchestration can optimize workflows for everyone involved in the procurement process.

Procurement by the numbers: A case for procurement orchestration

The key reason businesses are looking at procurement orchestration is to add a collaboration layer for their procurement processes that increases stakeholder adoption across the company. 

How do procurement orchestration layers accomplish this? Consider the numbers, which paint a picture of painfully slow, stop-and-start processes internally. 

According to research by Zip:

  • Nearly half of over 1,000 businesses surveyed indicated they need six cross-functional approvals for new software or vendor purchases. 
  • 27% of respondents said they require more than 10 approvals. 
  • 32% of finance and accounting professionals said it takes three weeks or longer to secure approval for new purchase requests. 

The question is: how do you manage these needs and streamline the intake and approvals processes? That is where modern procurement orchestration diverges from traditional methods. 

Problems procurement orchestration solves

If you’ve already adopted one or more common procurement solutions, you might have experienced one of these problems in your procurement team:

  • Too many systems and fragmented processes
  • No central repository of procurement data
  • Fragmented procurement workflows, leading to maverick spend

As is often the case with many employees, new procurement policies and processes are often met with resistance. In many ways, this is simple behavioral science: even when traditional methods are unwieldy or problematic, teams can be resistant to change—from executive leadership on down! 

Fortunately, procurement orchestration offers so much advantage that it’s impossible to ignore.

Key components of procurement orchestration

When executed properly, how does procurement orchestration make for a healthier intake and approval process?

Automated workflows and processes

From the moment of purchase initiation, every manual touchpoint slows down intake and approval processes. As mentioned earlier, 27% of survey respondents said they require 10 or more approvals. It’s easy to see how a fragmented, manual process can quickly become a significant drain on efficiency. 

Automated workflows and processes streamline time-consuming processes and integrate with existing systems and technologies (e.g., ERP, Procure to-Pay). Technological inertia is real—and not just limited to the procurement function.

Procurement orchestration can overcome this by integrating seamlessly with existing systems. A procurement orchestration layer works as an embedded platform on top of existing systems, unifying experience and reporting.

Process reporting and analytics

More data and metrics allows you to identify bottlenecks and streamline the intake process. Increased visibility also allows procurement teams to control rogue spend. 

Add in AI insights that can flag duplicate vendors and also provide other opportunities for savings and efficiencies, and a predictive procurement orchestration platform can immediately demonstrate value and impact.

Single front door for intake

Procurement orchestration allows you to manage the intake process by using a ‘single front door’ for employees to make requests. This easy access point makes for a simplified user experience that lends itself toward self-service for procurement. 

Just imagine if employees didn’t have to waste anyone’s time requesting help through email or Slack—just make your request at the single front door for intake, and every move is easy and fully transparent.

Benefits of procurement orchestration

Working with procurement orchestration providers introduces several efficiencies to yield an optimal intake process. 

These benefits include: 

  • Improvement in relevant KPIs like cycle-times and procurement NPS. With a procurement orchestration layer to streamline the procurement process, approval wait times no longer need to reach into weeks. 
  • By streamlining the process, you also overcome technological inertia among your employees. Reduced disruptions encourage employee buy-in, yielding an even more effective procurement orchestration process. 
  • With automated processes and more data, real-time decision-making can occur by the numbers and established processes. That way, rather than a hard-to-track patchwork of decisions made by potentially 10 or more stakeholders, procurement intake can flow from one central source of data. Time saved and rogue spend mitigated translates to cost savings for your business. 

What are the challenges associated with implementing procurement orchestration?

To be sure, there can be challenges associated with introducing a procurement orchestration layer to your intake-to-procure processes. 

Legacy tools, like P2Ps and ERPs, can make implementing procurement orchestration more difficult. Some tools may use custom fields that are more challenging to integrate effectively. Others may not play well with procurement orchestration layers that offer competing functionality.  

In addition, resistance to change among some procurement teams can be a challenging factor, as stakeholders may view procurement orchestration layers as yet another piece of software to complicate things. 

However, it should be quickly clear that having a single source of truth unifying all of procurement increases visibility, control, data integrity, and user-experience.

Procurement orchestration best practices

How can procurement professionals get the most out of orchestration? Like any tool, you will need to know how to best use it. 

Procurement orchestration best practices include: 

  • Developing a procurement policy aligned with business goals 
  • Creating a central repository of procurement data
  • Establishing clear workflows and rules
  • Monitoring and measuring performance in real-time
  • Encouraging collaboration between internal stakeholders and key approvers (e.g., legal, security)

Future trends in sourcing and procurement orchestration

Procurement is always evolving. As we look to the future, here are some potential trends that will impact the space: 

  • In a recent survey, 42% of CPOs said ‘supplier relationships’ will be one of their main focuses. Supplier selection, managing supply chains, and other sourcing needs do have opportunities for automation, but personal relationships will remain essential.
  • Digital transformation rate in procurement is expected to reach 75% by 2025, so it’s important to manage your procurement workflows with a tool employees love to use.
  • The rise and staying power of remote work will continue to yield both benefits and drawbacks for procurement teams. With hybrid and remote work trends remaining constant, businesses will continue to move to adoption of cloud-based procurement solutions. 
  • Amid economic headwinds, businesses are fighting for efficiencies. Per the aforementioned survey data, 62.6% of finance leaders say increasing efficiency and team productivity is a top priority for the coming year. Furthermore, almost half indicated they are looking to reduce operating expenses by more than 20% in 2023. 

How companies implement procurement orchestration with Zip 

Zip’s category-defining procurement orchestration platform makes adopting unified procurement processes easy for all stakeholders involved, at every step of the process.

With Intake powered by Zip, users can harness the power of AI-powered automations to direct requests to the appropriate stakeholders. Zip requires no training, providing a consumer-grade user experience for any employee to initiate or approve requests. Zip creates purchase requests and purchase orders at the right time, with automation and AI insights every step of the way.

Zip also offers a powerful way to streamline the approval process, automatically looping in the appropriate stakeholders with notifications at the right time for each purchase request. You can even parallel-track vendor approvals—allowing teams to work within the tools they already use—decreasing cycle times and improving the employee experience, driving adoption, and ensuring a process people want to use.

Ready to learn more? Book a demo today to find out why Zip is the procurement orchestration layer your team has been waiting for.

The Executive Guide to Procurement Orchestration

The Executive Guide to Procurement Orchestration

The definitive guide for understanding why procurement orchestration is the cutting-edge solution to achieving harmony across a fragmented software ecosystem

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