Here is why it’s the best time for BFSI sector to undergo Procurement transformation
Spend management is an important process in every industry. However, we are looking at the BFSI sector in particular.
Banking, Finance Services & Insurance (BFSI) sector is quite an attractive revenue market pool in Germany. According to the Wall Street Journal’s article ‘Should, Germany Be the New Model for European Banks?’, Germany has by far the highest number of credit institutes in Europe.
Not to forget, it certainly was hit during the great ‘financial crises. This led to many companies shutting down, but the ones that survived made it big. Not only that, but it also gave way to many new emerging companies. The importance of spend management increases in such cases. Let’s say BFSI in Germany is not going down anytime soon.
Did you know that a new work development – digitalization of the working environment, referred to as ‘work 4.0’, is quickly catching up in Germany? In November 2016, the German Federal Ministry of Labour and Social Affairs, headed by social democrat Andrea Nahles, published the white paper “Work 4.0”.
Work 4.0 reflects a growing consensus among German policymakers that changes the world of work, having inevitable impacts on the welfare state and social security systems. Many companies & employees have become more flexible towards agile working, mobile working, and crowd working.
These changing framework conditions have been evolved to compete with a stricter observance of employee protection rights. While this is being enforced, it’s time that companies make use of proper resources to maximize efficiency to achieve better output.
New Era of Procurement
With the advancement in technology & time turning into money, organizations are moving towards efficient use of time as well as resources.
According to 2019 CPO Agenda: Building Next-Generation Capabilities by The Hackett Group, “50% of organizations currently have a major improvement program underway for improving analytical capabilities. Since this is the most critically important focus area, procurement organizations are taking steps to address this need.“
With the primary focus of generating savings & contributing to the organization’s bottom line, more and more organizations are looking for investing in digital transformation & exploring AI.
Here is a case study of a European alcoholic beverage giant who underwent seamless procurement transformation with the help of Zycus Solution Footprint.
Know how the ‘New Era of Procurement’ will help companies overcome primary challenges:
Improved visibility into spend data
- Several banks that have different business units across different cities or even countries, lack spend visibility due to decentralization. By going digital, companies can manage all processes under one roof. Hence, this results in improved savings and better spend management.
- Spend Analysis Software is something that many companies will find useful in the coming days.
Reducing supplier risk
- Supplier risk is one of the major challenges that many in the BFSI sector face, mainly due to falling creditworthiness. One way to be safe is by maintaining a real-time view of operations & financial position of suppliers.
- Supplier Management Software helps companies meet their procurement objectives to give them a greater business impact.
- For BFSI companies, data is of utmost importance. and its security becomes a significant concern when they decide to go digital. With the right procurement solution and their certified data centers, they position themselves uniquely to play a proactive role in ensuring complete protection of data.
Classification & customization of spend
- BFSI sector with a specific focus in a particular domain look for customization of spend based on taxonomy. Hence, with the right procurement solution, one can create customized reports to not monitor spend categories. In addition, one can streamline processes based on requirements as well.
- Above mentioned were some basic features that every procurement solution should ideally be providing. If your company is still struggling with the above issues, then one can reconsider changing your procurement provider. Besides, there is much more that one can take advantage of while using the right solution.
If you want to know about Sustainable Savings for BFSI, check out our Whitepaper “Smart Procurement for Sustainable Savings” that talks about best practices & compliance.
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