As the world battles the ongoing crisis caused due to novel coronavirus COVID-19, Governments across the globe are scrambling to contain the spread of the virus. Terms like social distancing and quarantine have found their limelight in what many would say are one of the darkest times of the 21st century yet.
Disruptions to the supply chain have already had a cascading effect, with almost all leading share market indices witnessing record losses. An economic slowdown has ensued, and fears of a global recession are grappling the oceanic region.
Australia and New Zealand have already announced stimulus packages to counter the current situation, yet these packages are primarily aimed at keeping people at work. Businesses, on the other hand, need to find innovative ways to counter the current wave of economic and social disruption.
Procurement as a function has always helped organizations find ways to cut costs, and with the advent of modern-day technologies such as Artificial Intelligence (A.I.), procurement has also assumed strategic importance for organizations in the last few years.
Here, we discuss the top 3 ways in which businesses and government departments can take procurement’s help to overcome the challenges caused by COVID-19:
Keeping a tab on multiple spend avenues can be confusing and taxing, especially for large-sized businesses with multiple offices and/or for the Government departments with multiple sub-departments and agencies.
The first step is for the central teams to identify all spend avenues, including some, which normally get overlooked. While doing this task manually is optional, it is both time-consuming and prone to errors.
An automated spend analysis solution will help organizations not only identify their spend categories but also help in collating all spend data in a centralized repository, verify and cleanse data, categorize, and analyze spend.
While contracts are legal documents binding a buyer and supplier with an expectation that both parties will adhere to the agreed terms, it is bound to have exceptions most of the time. Out of contract purchases or maverick spending are one of the main points of contention for procurement teams trying to control costs.
In addition, most businesses and government departments in ANZ are still relying on manual processes to help identify contract leakages, which are time-consuming and are prone to human oversight. Missing key contract terms can be detrimental for buyers as either they end up paying more or end up missing key deadlines, which result in a strained relationship with existing suppliers.
Best-in-class contract management software that automates the entire process is what businesses and governments need. What’s more, with Artificial Intelligence making significant progress, new and modern-day solutions like contract metadata extraction BOT are now available which help in identifying key contract terms in a blink of an eye, while ensuring that no key contract terms are missed.
A lot of local government departments, councils, agencies in Australia and New Zealand are still dependent on manual processes for their sourcing and procurement activities.
Given that a large number of them depend on known suppliers and maintain their records manually, it inhibits them from exploring other suppliers which may offer better terms at optimum prices.
Also, with COVID-19 having a major impact on manufacturing, it is highly likely that most existing suppliers may have challenges to fulfill any urgent requirements. Be it Government health departments or private medical device providers, both are struggling to fulfill the sudden surge in demand for key safety gears to counter COVID-19.
In such a scenario, having a limited pool of suppliers to work with can prove to be a major roadblock in meeting demand. Instead, implementing an eSourcing software can help organizations reduce sourcing cycles by almost 15% while providing them an opportunity to reach out to multiple suppliers in one go.
On the other hand, while organizations have a huge pool of suppliers to choose, a lot of them are still dependent on manual processes to select a particular supplier, which may lead to haphazard price comparisons, eventually resulting in poor selection.
What organizations also need is an automated procure-to-pay solution that helps them shortlist suppliers based on key performance indicators like price, availability, delivery timelines, discounts, etc. Not only does an automated procure-to-pay solution help in selecting the best supplier, but it also helps in reducing the purchase order and invoicing timelines, thus ensuring a significant cycle time reduction in procuring essential goods.
While no one can currently predict the lifetime of COVID-19, its impact on Governments and businesses in ANZ and across the globe is worrisome.
As the economy takes a plunge, procurement teams can seize the moment by adopting modern-day technologies to cut costs, onboard new suppliers, reduce requisition cycle times, and help Governments and businesses ride this COVID-19 wave.