Technological Solutions to Common Procurement Challenges

To create a truly dynamic and advanced procurement function, it's critical to connect with the most innovative and disruptive technology trends. More so than the technology itself, procurement is looking for ways to practically deploy them to support existing business processes.

Technology is reshaping the "how" of procurement, as well as the "why." Procurement leaders are already looking at ways to apply machine learning to spend analysis, for example. With technology, sourcing will be more predictive, while more transactions will be automated. Fortunately, many of these emerging disruptive technologies integrate easily with legacy systems without the need for significant hardware and development investments.

What should procurement leaders be learning? A brief list includes smart contracts, artificial intelligence, predictive and prescriptive analytics, machine learning, chatbots, and robotic process automation. Disruptive technology could be just what your organization needs to address some long-standing issues in the procurement discipline.

Long-Standing Procurement Issues

Traditional procurement is based on a zero-sum power dynamic between a company and its suppliers. The emphasis is on bargaining power rather than exploring the full value of the relationship for all parties.

This outdated way of thinking fails to engage insights about the different risks and opportunities that arise in working from suppliers of goods and services. If an organization is only able to measure the procurement spend, then that's where its focus will lie. Long-term contributions from supplier innovation won't be appropriately valued, to the detriment of all parties involved.

Here's a look at the ways in which technology will disrupt procurement, now and in the future.


Big data has been a buzz word for several years, and it's finally permeating to the world of procurement. The good news is that procurement is well-positioned to use data for reports, spend analysis, supplier assessments and compliance checks.

Procurement organizations will be able to extract more value from the data harvested in the sourcing process. Buyers will collect and analyze suppliers' performance data and compare it with current market pricing and risk assessments in managing supplier contracts and relationships. Relationships can be built on overall value rather than the lowest prices. Data can be used to manage freight transportation spend, from parcel shipping to bulk commodities.

Pattern recognition software and machine learning join forces to categorize unstructured spend, cost, contract, and supplier data, to reveal new insights. One of the most disruptive forces in analytics is the use of unstructured data. Instead of relying only on information from an ERP or spreadsheets, unstructured data analysis incorporates AP records, T&E systems, text files, emails, social media and other sources. These signals can help monitor customer demand in real-time and manage risks due to weather and other external forces such as global risks.


Automation, augmented by artificial intelligence and machine learning, will allow many routine procurement tasks to operate without human intervention. The procurement team will focus on high-value, strategic efforts to support innovation and top-line growth.

AI will manage large volume orders and update inventory lists automatically. Procurement bots will be able to scale up to handle more aspects of the procurement process. Smart contracts and blockchain capabilities will be used to validate transactions and authorize automated payments.

Some aspects of corporate social responsibility compliance can be automated as well, such as monitoring required certifications and labeling.


Disruptive technologies will provide the capability for procurement to balance the desire for competitive pricing with the need to develop collaborative relationships that support innovative developments from suppliers. Technology will allow for deeper transparency and information sharing with suppliers, which goes against current procurement philosophies. With deeper relationships, suppliers will be more likely to invest in their own technology and development.

While the traditional bidding processes may not go away, the relationships will be supplemented with enhanced engagement with key vendors. With collaboration networks, buyers and suppliers permit transparency into all elements of their common value chains. All parties will access supplier information in the cloud and use the data to measure, analyze, and manage supplier performance. Joint planning sessions will uncover process improvement opportunities as well as identify and manage supplier risks.

If you'd like to prepare your procurement organizations to take advantage of disruptive technology, sign up for ProcureCon Indirect East 2020, taking place March 23-25 at the Omni Orlando Resort at ChampionsGate in Orlando, Florida. Download the agenda today to plan your schedule.

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