Procurement professionals have a lot of power to help reduce costs and boost efficiency to improve the bottom line. But reaching the point of effectively accomplishing these things means having to overcome challenges in the process. The exact nature of the challenges procurement teams face can vary from company to company, but there are some common recurring responses.
Lack of Visibility
Unquestionably, a lack of transparency in the supply chain causes one of the most common challenges in procurement. 65% of procurement professionals have no visibility beyond tier-one suppliers and lack a strong understanding of underlying cost drivers. And when data is kept in silos rather than stored in a central location, it can be difficult to access or understand.
Data Inaccuracy
It’s essential for procurement professionals to be able to make informed decisions, but informed decisions can only be as good as the information on which they’re based. 48% of procurement leaders struggle with making data-driven decisions because of concerns that current value measures are out-of-date and no longer relevant. This is another issue where data silos can be a contributing factor because when data isn’t collected in a consistent way, the data, in turn, can be inconsistent and unusable between departments.
Risk Management
The supply chain will always involve some degree of risk on many different levels, including invoice fraud, compliance risks, product quality and supplier performance, just to name a few. But having access to both historical and real-time data can make it easier to avoid and mitigate as many risks as possible. 55% of procurement professionals report not having enough insight into supplier performance. With access to timely and relevant information, procurement teams are empowered to analyze the risks involved with all courses of action so they can accurately identify the best suppliers to work with, improve transparency and increase buying power.
Inadequate Technology
It’s essential for procurement professionals to be able to make informed decisions, but informed The Advanced digital technologies have the potential to fully revolutionize the procurement process, but many companies struggle with digitizing their operations. 48% of procurement leaders believe they are underutilizing digital technologies, which limits their ability to identify things like spend anomalies.
Overcoming Procurement Challenges
Given the impact procurement can have on a company’s bottom line, it can be worthwhile to learn more about how digital solutions can help with the process. Our smart procurement solutions drive procurement excellence by creating a connected technology ecosystem that enables process automation, strategic sourcing, spend optimization, supplier diversification, real-time collaboration and contract governance. Contact us today to learn more.
