Procurement and Purchasing
3 min read
Imagine a procurement intake process plagued by long cycle times, opaque approval processes, and rampant rogue spend. This is why so many stakeholders avoid or ignore the formal procurement process: because it often creates more headaches than solutions. Procurement orchestration offers a solution to all of those problems by enabling an easily adoptable procurement process across all of your currently installed systems.
Procurement orchestration is the process of centralizing all purchase intake requests and coordinating needed cross-functional approvals to create a purchase requisition. Increasingly, businesses are applying intake-to-procure solutions to enable procurement orchestration layers, by creating a single front door for intake that spans current procurement systems.
Procurement orchestration encompasses tools and strategies that help maximize spend visibility and augment efficiency of procurement teams. Think of it like a powerful spotlight guiding the way in a dark room, as opposed to traditional methods, in which team members wander around on their own by candlelight.
Another way to think about procurement orchestration providers is like a collaboration layer for your procurement tech stack. You may already be using ERP functionality, a procure-to-pay (P2P) system, or even best-of-breed solutions for contract lifecycle management (CLM) or supplier information management (SIM). Intake-to-procure solutions unify this IT landscape, creating a procurement start button for stakeholders to make any request — a new purchase, a new contract, onboard a new vendor, or even an independent contractor.
Because procurement orchestration adds a layer of collaboration, it provides a step change improvement over fragmented, manual processes offered by many older solutions. To learn more about this trend is changing procurement and supply chain management, check out our recent webinar, “Forecasting the Future: Executive Predictions for 2023.”
The key reason businesses are looking at procurement orchestration is to add a collaboration layer for their procurement processes that increases stakeholder adoption.
How do procurement orchestration layers accomplish this? Consider the numbers, which paint a picture of painfully slow, stop-and-start processes.
According to Zip research, nearly half of over 1,000 businesses surveyed indicated they need six cross-functional approvals for new software or vendor purchases.
Taking it a step further, 27% of respondents said they require more than 10 approvals.
Meanwhile, 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.
If you’ve already adopted one or more common procurement solutions, you might have experienced one of these problems in your procurement team:
As is often the case with many line of business employees, new procurement policies and processes are often met with resistance. From a behavioral science perspective, even when traditional methods prove to be unwieldy and ineffective, teams can often be resistant to change, from the CPO on down.
When executed properly, how does procurement orchestration make for a healthier intake and approval process?
The components of procurement orchestration include:
Working with procurement orchestration providers introduces several efficiencies to yield an optimal intake process.
Those benefits include:
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 can initial view procurement orchestration layers as yet another solution.
How do you get the most out of procurement orchestration? Like any tool, you will need to know how to best use it.
Procurement orchestration best practices include:
Procurement is always evolving. As we look to the future, here are some potential trends that will impact the space:
Zip’s category-defining intake-to-procure platform makes adopting procurement processes easy for all stakeholders.
With Zip Intake, users can harness the power of automation and data to direct them to the appropriate stakeholders. Furthermore, Zip requires no training, providing a consumer-grade user experience for any employee to initiate or approve requests. Zip Intake creates purchase requests and purchase orders at the right time, too.
Zip Approvals streamlines the approval process, automatically looping in the appropriate stakeholders at the right time for each purchase request. You can even parallel-track vendor approvals when it’s logical to do so.
Sign up to demo Zip and see it in action for yourself.
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