Can procurement technology boost your brand? Yes!
McKinsey & Company has revealed that brands with strong reputations generate 31% more return to shareholders than the MSCI World average. Just as stock prices surge in the event of positive market sentiment, any dent in the company’s reputation negatively affects stock performance. Clichéd but a reality nevertheless, each department’s performance synergizes into the company performance.
At a time when HR has transformed into ‘business partner’ and engineering becomes ‘agile’- how do Procurement professionals ensure their alignment with the brand beyond being recognized as ‘cost savers’?
Is all publicity good publicity?
Ok. So let’s list down the major events that gave your customers things to complain about:
- Failure to deliver on time
- Dissatisfaction with the quality of the product or service
- Irresponsible supply chain
- Regulatory scandal
The common thread underlying all of these events is that they are bound to occur when the supplier base is mismanaged.
The Forrester Wave™: Source-To-Contract Suites, Q4 2019 where Zycus is cited as a Leader marks that, “Choosing the right suppliers for the spend categories that matter, creating the right contract with these suppliers, building the right relationship with suppliers, and achieving the right performance from them with the lowest risk — all of these activities help a firm establish a base of supplier partners that will help it win in the market.”
For successful brands, which customers have positive things to share about, you need supplier collaboration.
Companies need reliable suppliers who deliver on time, are compliant, and have resilient supply chains. Additionally, they need another set of suppliers as a fallback option. Their information has to be readily available, accessible across teams- legal, procurement, and finance and updated.
Top 3 reasons companies fail at leveraging their supplier base
At a primitive level, there could be a lack of technology resulting in companies missing out on the opportunity to capture and use all that transactional data for insights. Consider manual tracking of supplier performance. With how much confidence can you say- “At point X in time, my team has been buying from the company’s contracted suppliers with up-to-date compliances?”
At an advanced level, the organization could be using obsolete technology that no longer supports its size and intricacies of operations.
The third and most common reason is failed implementations– as is the case with most ERPs. We have heard of complicated UI leading to low adoption, high licensing costs, and archaic heavy lifting/ middleware based integration. How can Procurement teams using archaic technology keep pace with teams that have made the shift to Artificial Intelligence in procurement?
Consider the case of Global Blood Therapeutics (GBT), a leading USA based biopharmaceutical company. It has over 2100 suppliers on board and has processed over 147 million USD to date. With their incumbent procurement module (which is an ERP product), they faced major issues like:
- Low user adoption
- Difficulty in extracting reports
- Poor supplier collaboration
- Contracts were not integrated with the Procurement solution
With Zycus’ solution implementation, GBT could evaluate suppliers based on their Regulatory Impact Assessment status. GBT also accelerated its contracting processes and enhanced regulatory compliance.
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How You Should View Supplier Collaboration
To begin with, supplier collaboration is NOT a discrete process. The journey to supplier collaboration starts from the very beginning of your Source-to-Pay process. And as pointed earlier, with Artificial Intelligence-powered procurement solutions, organizations today can optimize their procurement processes like never before. Why? Because AI has the power to churn all your transactional data, accurately, in the wink of an eye and assist humans in making fact-based decisions.
- Start by analyzing your spend data
What are the most popular categories of spend, suppliers, stock-to-purchase ratio, off-contract purchasing- these are some of the metrics you should be tracking. Sounds cumbersome? But you can only improve what you can measure. Explains why most companies are shifting to AI in Procurement.
- Simplify your sourcing process
An automated solution accelerates sourcing and eliminates fraud. With greater transparency, you can be assured of only the most qualified suppliers reaching the contract stage. Keeping our promise of sourcing that is ‘strategic’ – Zycus’ recent innovation iLogix has made it possible to analyze 60,000 lines across 5 suppliers in less than 30 seconds.
- Ensure contract visibility
Your team members would happily buy from contracted suppliers, and maverick spend would be drastically reduced- if only buyers had visibility into contracts while making purchase decisions. On the other hand, many a time procurement departments are not aware of contracts about to expire simply because there are hundreds of contracts but no single system to alert when a particular contract is about to expire.
- Archive and use supplier data
data that you store should be complete, updated, and non-duplicate. Monitoring supplier performance is a crucial aspect of Supplier Management. However, it can easily be under-resourced and neglected. Even when performance is evaluated, the KPIs often fail to capture information. Find out more about Best Practices for KPI Creation.
- Smart Catalogs
Catalogs allow robust controls on spend and content validity. These have AI-based classification for all catalog items. Content validity can be easily managed across geographies, teams, projects, and business units.
- Automate Accounts Payable
teams spend more than half of their day doing activities like extracting invoices and answering supplier queries. These are repetitive activities that can be automated and performed with higher accuracy with bots.
Realize state-of-the-art Procurement with Merlin
Zycus Merlin A.I. Platform is a one-of-a-kind platform for procurement to leverage cutting edge A.I. technology by using BOTs to perform, routine, mundane, or data-intensive tasks. Our Merlin BOTs ensure gains across strategic and operational procurement processes and source systems, thereby unlocking long term strategic advantages of FTE reduction, improved turnaround time, enhanced quality, and job role improvement.
The comprehensive Zycus Merlin A.I. platform leaps towards the future of procurement through multiple smart BOTs for the entire spectrum of the procurement domain. Starting from requisition automation and unified search experience for catalogs, we also enable complete automation of the invoicing process through inbound email automation and accurate invoice extraction.
We also help you add value through effective risk management by detecting duplicate and fraudulent invoices. Our Merlin A.I. platform boasts of its presence in the strategic Source-to-Contract suite with BOTs that can reduce time spent on data entry and identify risks during the contracting phase.
Experience the combined power of leading Source-to-Pay solutions, coupled with multiple smart BOTS across the suite, to go beyond procurement automation and achieve un-paralleled efficiencies at scale.
An Intelligent Source-to-Pay solution plugs the gaps in your Procurement process and makes managing suppliers easy- one way to manage your company’s reputation.