By Cara Vollmer, Senior Content Strategist, Oracle
Today's enterprises have taken steps to streamline procurement—but have work to do to optimize their entire source-to-pay process. Their biggest obstacle: supplier management.
That was one of the key findings of a new report from Gatepoint Research, sponsored by Oracle. Of more than 100 procurement and operations executives surveyed, 41 percent said qualifying and managing suppliers is their most pressing problem.
It’s not hard to understand why. Today’s procurement teams are tasked with managing a multitude of supplier relationships, and the complex issues they involve. More than half of the survey respondents report dealing with 100+ suppliers, and 12 percent have completely lost count. For those using error-prone, manual processes to manage everything from requisitions to payments, it can be difficult to make intelligent purchasing decisions.
|The Gatepoint Research report, titled, “Trends in Strategic Procurement,” examines this and other procurement challenges, looks at employee purchasing methods and systems, and reveals the short-term strategic goals of firms representing a wide range of industries and revenue levels.|
CFOs focused on improving their company’s performance are now looking to procurement as a strategic business partner—making it increasingly important to streamline supplier management and enhance efficiencies.
The key to success: Automation. Nearly half of the procurement executives surveyed by Gatepoint Research cited automation as the top capability to help them meet their strategic goals this year and beyond. Recent research from McKinsey & Company supports this, finding that 47 percent of the tasks involved in supplier selection, 58 percent of the tasks involved in supplier management, and almost 60 percent of the tasks involved in the entire source-to-pay process can be fully or largely automated using emerging technologies.
When seamlessly integrated with other core business processes, such as finance, procurement automation can deliver increased visibility into spending and help control costs. In fact, McKinsey & Company found that automating the entire source-to-pay process can reduce overall spend by up to 3.5 percent.
Forward-thinking companies, such as Rancon Group and Capgemini, are already taking advantage of digital platforms to optimize their procurement functions. Not long ago, these organizations were using manual processes to manage POs and requisitions, qualify and onboard vendors, and more. This led them to seek a cloud solution that could increase automaton, optimize business operations, and reduce supplier risk.
After implementing Oracle Procurement Cloud:
“By using the standard capabilities of Oracle Enterprise Resource Planning Cloud, we were able to quickly have a system up and running, and after only a few training sessions our entire team was able to complete the sourcing and supplier registration process in the cloud,” said Jasper Oskam, senior Oracle ERP Consultant at Capgemini Nederland, B.V.
By automating and optimizing procurement in the cloud, organizations can achieve these results and more—and develop strong supplier relationships that go the distance.