The enterprise’s economic activity and the successful implementation of its goods and services on the market depend on how competitive and smooth the procurement process is built at the enterprise.
When conducting procurement procedures, customers and managers often make mistakes that affect all the procurement process results.
It is worth mentioning that managers, being key decision makers, directly impact all purchasing processes, from products’ time-to-market and satisfying customer needs to complying with regulations and finding ways to reduce costs.
5 Issues That Procurement Leaders Face
A procurement business solution provider analyzed the procurement challenges and highlighted five main ones that purchasing managers faced in 2022.
Please read the article to find out which SAP solutions will help you avoid them.
#1. Mitigating Supplier Risks
The area of procurement is very often exposed to risks. Natural disasters, wars, strikes, and pandemics can completely disrupt the activities of your suppliers.
Even minor incidents, such as car accidents or any other short-term factors, ultimately affect the competitiveness and financial position of the company.
And since such cases occur often, organizations should understand how to predict and manage these ever-changing risks to ensure business prosperity.
SAP offers SAP Ariba Supplier Management solutions, which can help solve problems such as risk tracking, root cause identification, risk assessment, incident notification, and more.
#2. Reducing Spend
Although the pandemic that caused the global crisis no longer poses a real threat, the world is still going through hard times.
Due to the tense geopolitical situation, Europe’s energy and economic crisis impact all business areas: inflation is rising, and prices for products and services are spiking.
According to Hackett’s studies, 42% of businesses anticipate increased prices and cost volatility in 2022. Therefore, it is no surprise that companies are seeking a solution to help them save money.
SAP has several solutions that can help reduce costs. One of them is SAP Business Network.
The solution facilitates the optimization of your supply base by allowing you to choose from vast numbers of suppliers across a variety of categories, thus, generating competition and driving down costs.
SAP Ariba Spend Analysis solution provides valuable insights which help create category plans and make strategic decisions.
#3. Speeding Up Digital Transformation
Digitalization of procurement is the enhancement of procurement processes by using IT technologies, such as AI, Machine Learning, or IoT, which increases the productivity of the company and the level of interaction with customers and suppliers.
Its decisive impetus was the 2020 pandemic. However, with each passing day gaining momentum, digital transformation is taking hold in businesses.
According to surveys, the enterprise’s digital transformation is the main agenda for more than 60% of companies.
SAP helps accelerate your digital transformation: all its solutions are designed to improve your business processes with the help of technology.
#4. Enhancing Analytics
How to understand which processes need improvement if the company cannot access accurate analytics? Many executives are interested in a solution to help them get the most out of their company’s data.
74% of companies are presently focusing on initiatives to improve and expand their data, insight, and analytics capabilities to clearly understand what is happening in all company departments and use data to improve decision-making.
SAP Ariba Spend Analysis based on Machine Learning is such a solution. The solution provides a deep analysis of your company’s spending data.
For example, it allows you to structure data from different systems and use it to understand and adjust your spending.
#5. Improving Flexibility
Procurement professionals should be more adaptable if they want to make more strategic decisions. The secret lies in developing the ability to switch quickly.
For example, if the enterprise wants to create a new product that requires different raw materials, finding, vetting, and on-boarding a new supplier should not take months.
In addition, launching a new product is always associated with various risks: missed deadlines, price increases, etc.
SAP solutions can assist you in boosting agility within procurement. Ariba Sourcing Suite helps companies address strategy development, sourcing, and faster time-to-market issues.
Procurement management is a complex and often messy process. Fortunately, the world of technology does not stand still and offers enhanced tools and solutions that will help achieve efficiency and increase profits.
SAP solutions are among them. If you want to transform your business, it’s time to turn to a trusted SAP solution provider.
