How A Cloud Procurement System Can Help Businesses in 2023
There’s no denying that cloud-based applications give businesses more flexibility, agility and scalability. And in 2023, a cloud procurement system may be the best route to avoid getting caught in supply chain bottlenecks.
Supply chain issues are expected to persist throughout 2023 and threaten the continuity of UK businesses. And this is where cloud procurement tools can help to give you the edge.
The challenges faced by procurement teams in the last two years have been challenging. Numerous UK businesses have been hamstrung with buying in bulk to avoid delays in the supply chain. But that has also meant splurging out for larger warehouses to store goods – and thus lower revenues.
A Gartner survey of supply chain professionals revealed that almost 85% of respondents reported feeling tired and burnt out during the Covid years. Most commodity managers felt like they were jumping from one supply shortage escalation to another.
A potential solution to help enterprises navigate the procurement crisis in 2023 is a cloud-based procurement system. The shift will enable you to engage in constructive negotiation, determine the market price dynamic and secure the best prices on offer.
Cloud procurement systems have built-in tools that enable you to automate business processes, access analytical data that support strategic sourcing, ease supplier relationship management and streamline purchasing.
In other words, you have access to multiple sources and purchasing options in just a few clicks. With this level of operational simplicity and agility, procurement teams can manage risks and leverage rewards, enhancing cost savings that accrue more profitability.
When you consider the economic pressures of inflation and recession, businesses don’t have time or money to waste running into supply chain bottlenecks.
Suppliers are not going to lower their prices but with the real-time market prices to hand, procurement teams can act quickly and decisively. A cloud-based procurement system gives you a competitive advantage.
What Tools Do You Need in an Effective Cloud Procurement System?
There are several cloud procurement systems available, but not all of them deliver the tools you need to take advantage of the system. Must-have features in a cloud procure system include:
- Budget management
- Data insights and reports
- Vendor management capabilities
- Supplier lifecycle management
- Risk management
- Time-saving automation
- Approval workflows
- Customer support
Microsoft Supply Chain Platform
Cloud procure systems simplify the acquisition of goods and services by enabling you to collaborate in real time. The intuitive search function takes you directly to the marketplace and negotiates with vendors, suppliers and stakeholders.
That’s precisely what the new Microsoft Supply Chain Platform (SCP) is designed to do. The tech behemoth’s latest tool provides businesses with the tools they need to ‘navigate every challenge” within their supply chain.
You could argue that cloud-based procurement systems are critical for UK businesses given the turmoil Brexit has left in its wake. Britain basically has to re-develop its manufacturing sector instead of relying on Europe and China to supply goods.
UK companies can no longer rely on the “just-in-time” model given the unpredictability of existing supply chains and price fluctuations. SCP gives you access to a broader scope of existing supply chain data and applications.
SCP has a number of powerful tools that empower procurement teams to capitalise on market opportunities. These tools include artificial intelligence built into Microsoft Azure which enables businesses to delve deeper into the supply chain and understand where vulnerability and risk might be lurking.
Azure AI models can be programmed to provide oversight of supply and demand. With access to a wider dataset, account managers should be able to predict supply constraints and shortages.
We’ve previously written about how Microsoft SCP can ease your supply chain woes in quite some depth, but just to recap in brief, some of the most useful tools are:
Smart News Insights
An interesting feature which gives decision-makers access to the latest industry news. This can help keep the supply chain ecosystem informed of potential bottlenecks and pave the way for real-world planning.
Provides data insights that remove some of the risks involved when partnering with new suppliers. If you’re using multiple sources, this tool can help you to predict outcomes that influence your decision to place and receive orders.
Accounting software built into procurement systems assist with the management of cash flow. This could be critical for small businesses that tend to pay suppliers on time but allow customers to slip beyond the due date – another reason existing supply chain models are considered “brittle”.
Cloud Procurement Strategies
It’s fair to say that legacy systems are complex and inflexible. They have an extended implementation cycle and usually require a significant amount of investment capital. Moreover, the systems are inefficient and don’t always deliver on their promise.
Furthermore, procurement teams often feel marginalised. Most procurement professionals act as mediators between end-users and vendors, focusing on the details of the contract rather than serving as advisors with shrewd insights.
In the current climate, procurement teams are essential for executive leaders to make strategic decisions. But the fragmentation of legacy systems may not provide critical insights for decision-makers to make the right call.
Cloud procurement solutions seek to resolve common issues experienced by procurement teams. SCP, for example, allows you to your supply chain in its entirety; from vendors and suppliers to your customers and beyond.
In addition, cloud-based procurement systems are designed to provide businesses with efficient tools that enable them to track and manage their purchasing activities more easily.
However, procurement professionals still need to implement a strategy that enables them to extrapolate reliable data and influence decision-making. Here are four tactics.
1. Organise Data silos
Every industry has its own set of circumstances and dynamics which can scupper your plans and influence supply and demand. When something goes wrong, stress levels can rise and panic sets in.
Cloud procurement systems can save you a lot of time hunting for alternative sources. With direct access to a pool of suppliers, you can spend more time identifying cost-effective opportunities and negotiating the best prices.
Breaking down data silos enables you to optimise pricing charts and identify priority contracts. Essentially, you remove costing from the mouth of a vacuum and order opportunities to fit your budget calculations thus minimising the chance of waste. You work smarter, not harder.
2. Access Valuable Data
A procurement should naturally be aligned with the goals of the business. But in an uncertain climate, businesses may need to adjust the goalposts to fall in line with the market.
Cloud procurement systems provide analytical insights that enable businesses to be agile and respond to the changing dynamics of the market. The capacity to evaluate opportunities and identify spending across multiple categories enables you to make informed decisions and effectively manage costs, service terms and delivery times.
3. Eliminate Unplanned Contract Renewals
Contract renewals can cause procurement teams to be reactive rather than strategic. If costs increase that you haven’t planned for, it could have a detrimental knock-on effect across other areas of your spending allowance.
Cloud-based procurement systems can help you to eliminate unplanned costs in the event of contract renewals putting a dent in your budget. Providing the data has been input well in advance, businesses can factor in the cost of contract renewals months in advance.
Alternatively, you will have instant access to alternative suppliers in the market that may be offering a better package for competitive prices. Data insights like these give you more scope to strategise and avoid wasting time looking for solutions in a small timeframe. If you only learn that prices are increasing one month in advance, it’s panic stations again.
Furthermore, knowing what your other options give you stronger bargaining power in negotiations over a new contract – particularly if you want to stay loyal to a partner you have worked with for many years.
4. Continuous Spend Management
Procurement is focused on finding, purchasing and optimising ROI which means spend management is a continuous cycle. Procurement teams, therefore, need access to reliable data in real time that enables them to continuously evaluate price trends, license usage, and consumer behaviour.
Businesses that continue to operate in data blind spots risk missing out on opportunities that have the potential to be more profitable. And if your revenue margins are fine – a common experience for businesses during a recession – the sourcing decisions made by procurement teams become critical for business continuity.
Because cloud procurement systems are customisable, you can create any type of order process, reporting and lines of communication that makes your job easier. For example, creating a high-level overview for executives that provide a snapshot of the costs involved to meet objectives together with opportunities in the market.
Trouble-Shooting Cloud Procurement Security Issues
The only disadvantage of a cloud procurement system is GDPR compliance. Because there is a higher risk of compromising sensitive data, cloud security issues can put your supply chain at risk.
However, club security is proven to be effective for the most part. Providing you install practices that explain security, privacy and auditing provisions, cloud security risks are significantly minimised.
We also recommend that you use a cloud procurement system owned by a reputable brand that understands the compliance pressures and complexities involved with data privacy regulations. Alternatively, partner with a cloud specialist to ensure you set up cloud security properly.
The only other option is to reduce security risks by creating a hybrid cloud environment and storing sensitive data on-premise. However, this option is costly and complex with practical zero advantage.
Cloud-Specialists in London
Today’s businesses rely on IT technologies like cloud procurement systems to help them run efficiently. But unless you understand cloud environments and create the right IT architecture to optimise cloud-based software, conflicts can occur and cause downtime – that could have been avoided.
Micro Pro is a cloud specialist and has been working with businesses in London and the southeast for more than 20 years. Our experienced technicians are seasoned professionals with in-depth knowledge of planning cloud architecture and IT strategy.
In addition, our senior executives can offer advice and assistance about IT Security, compliance and cost saving. Whilst cloud procurement systems like Microsoft’s Supply Chain Platform appear to provide UK companies with the potential to source goods and services during a supply chain crisis, the investment is null and void if you don’t successfully integrate the new software into your existing framework.
For more information about how Micro Pro’s cloud specialists in London can help you acquire the right procurement system and ensure your IT network delivers optimal performance, get in touch today and speak with a member of our friendly and knowledgeable team.