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Jul 05

Competitive Sourcing in Procurement

By Procurement No Comments

Effective sourcing in procurement is no longer a luxury—it’s a necessity.

For finance and procurement executives, understanding the intricacies of sourcing is crucial in ensuring a stable supply chain, mitigating risks, and ultimately achieving a competitive edge.

But what exactly is sourcing in procurement, and how does it unlock value for businesses?

Understanding Sourcing in Procurement

Sourcing is the process of finding the most suitable suppliers of goods and services for a company. It’s about balancing cost, profit margins, and competitiveness. The right supplier must offer a good enough price so that the acquiring business can make a profit margin by trading or using the product in their production process, all while considering the actions of competitors.

Although often used interchangeably, sourcing and procurement are distinct but related concepts. Sourcing involves finding, vetting, and onboarding suppliers, whereas procurement deals with the steady flow of goods through the supply chain.

The Importance of a Sourcing Strategy

In order to attain a stable supply chain, it’s important to develop a proper sourcing strategy. A sourcing strategy serves several purposes:

  1. Consolidating purchasing power: A strategic approach to sourcing allows a business to negotiate for lower unit prices through bulk purchases. This can result in higher profit margins or lower selling prices, thereby increasing the competitiveness of a company’s products.
  2. Risk mitigation: By conducting research on prospective suppliers, a company can avoid suppliers who are not a strategic fit, perhaps in terms of capacity, culture, or regulatory compliance. This can protect the company from possible disruptions arising from a supplier’s non-performance.
  3. Scouring the market for opportunities: Strategic sourcing is an ongoing process of searching the market for new opportunities. New suppliers with superior product quality, more competitive prices, or even new production technology may emerge. The role of the sourcing team is to establish contact, gather intelligence, and lay the groundwork for future contracts, helping the business stay competitive in the long term.

The Sourcing Process: A Step-by-Step Guide

The sourcing process can be broken down into seven key steps:

  1. Analysis of Internal Needs: This involves determining the goods and services the company needs to acquire, as well as how much of each item is required based on past requirements and activity growth projections.
  2. Researching the Market: The organization should research the market to find potential suppliers and their offerings. This includes considering logistical costs and the risks that arise from working with each of them.
  3. Developing the Sourcing Strategy: The company comes up with a method of determining which supplier to work with, ensuring both reasonable costs and supply chain stability.
  4. Requests for Proposals and Quotes: Once potential suppliers have been identified, the company will invite them to send in their bids to supply goods or deliver a service. These proposals need to be detailed enough for the sourcing team to assess the supplier’s capacity to deliver.
  5. Negotiating Contracts: After receiving proposals, the company will shortlist suppliers they want to work with based on an objective criterion. This often involves negotiations for adjustment of certain terms.
  6. Onboarding and Integration of the Suppliers: Once a contract is signed, the supplier undergoes a formal onboarding process, which involves setting up communication lines.
  7. Assessment of Results: Sourcing is an ongoing process, and for current suppliers, the company has to monitor their performance against predetermined standards continually. This is a critical part of supplier relationship management.

Sourcing Strategies to Consider

There are several types of sourcing strategies, including near-sourcing, insourcing, global sourcing, sub-contracting, captive service operations, manufacturing, vertical integration, and joint ventures. Each comes with its own set of benefits and challenges.

For instance, near-sourcing can save on cost and time in transportation but may require a higher initial investment. Conversely, offshoring can offer cost savings but often incurs additional time and costs in transportation.

The Power of Technology in Sourcing

The use of technology can help streamline sourcing activities. From gathering information about suppliers and sending requests for proposals to performance benchmarking and assessment, digital tools have revolutionized the sourcing and procurement process.

According to a Gartner survey, 85% of businesses have already implemented, or plan to implement, digital procurement solutions in the next two years.

 

With a proper understanding of sourcing in procurement and the use of strategic sourcing practices, finance and procurement executives can unlock significant value for their organizations.

By adopting efficient sourcing strategies and leveraging the power of technology, businesses can streamline their procurement processes, reduce costs, increase competitiveness, and ultimately drive growth.

 

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Jun 14
procurement managed services for PE

The Undeniable Value of Procurement Managed Services for Portfolio Performance

By Private Equity No Comments

Operating partners always search for innovative strategies to optimize portfolio companies’ performance.

Procurement, an often-overlooked area, presents a remarkable opportunity for cost optimization and improved operational efficiency.

The key lies in procurement-managed services.

The Game-Changing Nature of Managed Services

Managed services bring a fresh, data-driven strategy to procurement, transforming this traditionally administrative function into a powerful value driver. Backed by cutting-edge analytics and deep industry expertise, these services rapidly become a game-changer in procurement.

The Power of Intelligent Buying and Smart Spending

By shifting to managed services, one can realize an immediate 8% to 12% reduction in purchase costs. This is enabled by sophisticated analytics and a network of experienced procurement professionals who provide comprehensive support.

The approach is all about intelligent buying and wise spending, delivering sustainable savings across all spending categories.

Leveraging Volume Aggregation and Expert Insight

Managed services offer the advantage of volume aggregation and expert insight.

By aggregating demands from multiple clients, they can negotiate better prices, particularly in low-spend areas. Moreover, their scale provides deep expertise and real-time market insights across various categories, allowing us to learn from industry leaders and enhance our capabilities.

The Significant Cost Savings of Strategic Procurement Activities

The potential cost savings from strategic procurement activities are significant.

Consider this: one company slashed its operating costs by 19% by outsourcing its entire purchasing function. Another firm captured average savings of almost a third in its first three significant categories tackled following establishing a new central purchasing function.

The Need for a Well-Informed Perspective in Transitioning

Yet, like any strategic decision, moving to procurement-managed services must be made with a well-informed perspective. While effective for transactional activities, labor arbitrage can limit savings in strategic buying activities that require close internal cooperation.

Capturing the benefits of demand and specification management, which can account for 40 to 50 percent of total savings, also requires close collaboration with other business functions, which can be challenging for an outsourced provider.

The Transformational Impact of Procurement Managed Services

Procurement-managed services represent a significant opportunity for operating partners.

Leveraging advanced analytics, expert knowledge, and industry best practices can transform the procurement function of your portfolio companies into a strategic asset.

As always, it’s essential to approach this with a clear understanding of your portfolio companies’ unique needs and capabilities to ensure a successful transition.

As an SAP Ariba™ Gold Partner, Premikati is a leading services provider for all facets of Ariba™ and procurement in general.  To contact our team, click here.

Jun 05

The Power of Automation: Unleashing Efficiency with SAP Ariba Commerce Automation

By Procurement No Comments

Businesses today are realizing the urgent need for procurement and spend management innovation. Key decision-makers, particularly those in finance and procurement, seek solutions to streamline processes, boost efficiency, and improve organizational visibility. This is where SAP Ariba Commerce Automation enters the scene. 

 What is SAP Ariba Commerce Automation? 

SAP Ariba Commerce Automation is a solution designed to supercharge your procurement processes through powerful automation. Its primary goal is to enhance operational efficiency and ensure a steady supply chain by improving spend visibility and fostering efficient collaboration with suppliers. 

It’s a solution recognized for its innovation and effectiveness, with SAP being recognized as a leader in the 2022 Gartner Magic Quadrant for Procure-to-Pay (P2P) suites for the seventh consecutive time. 

Key Features: A Deep Dive 

SAP Ariba Commerce Automation comes with a suite of features designed to optimize procurement operations: 

  • Regulatory and Business Process Compliance: The solution ensures digital matching of invoices to POs and contracts, thus enabling compliance with regulatory requirements through e-invoicing. Transactions are validated based on configured business rules, reducing manual intervention and exceptions. 
  • Automated Procurement Workflows: The solution automates manual processes, freeing up workforce capacity, decreasing operating costs, and increasing productivity. It also enables digital delivery of POs to suppliers across a business network. 
  • Supplier Portal: The portal allows suppliers to flip a received PO on the network into an invoice, eliminating data entry and other errors. It also gives suppliers a view into invoice status updates, reducing inquiries. 
  • Invoice Status Portal and Transaction Visibility: This feature provides visibility into orders and invoices with a holistic view of spend. It allows suppliers to configure notifications to receive emails when their invoice status changes, promoting adoption for long-tail suppliers through self-service updates and invoice visibility. 

Impressive Benefits 

The benefits of SAP Ariba Commerce Automation are as significant as its features. These benefits include: 

  • Improved Procurement Compliance: The solution supports business process compliance with highly configurable business rules on the network. 
  • Automation of Spend Management Processes: The solution enhances productivity, lowers operating costs, and frees up people’s capacity by automating paper-based and manual processes. 
  • Increased Transparency of Business Spending: The solution provides a holistic view of organizational spending with greater visibility into orders and invoices in one platform. 

Recent Innovations and Future Outlook 

SAP is not resting on its laurels. Recent innovations and planned updates include: 

  1. Guided Buying: The next evolution in guided buying is here. The new capabilities improve the buying experience and leverage AI, intelligent recommendations, and machine learning. This creates a holistic view of what the buyer is purchasing and how it aligns with their organization’s environmental, social, and governance (ESG) goals. 
  1. SAP Central Procurement: The latest release of SAP Central Procurement addresses the challenges associated with centralizing procurement. It delivers the benefits of a uniform, centralized procurement system across all direct and indirect categories — without reworking individual solutions spread across the organization. 
  1. SAP Category Management: A new category management solution, SAP Category Management, is set to roll out this year. It will provide actionable market intelligence and category insights, empowering category managers and procurement professionals to make strategic category decisions. 

 

Statistics Highlighting the Importance of Procurement Optimization 

To underscore the significance of these advancements, let’s consider some compelling statistics: 

  1. Companies that excel at procurement have 20% lower costs, less supply chain disruption, and up to 55% fewer supplier defects (Source: The Hackett Group).
  2. High-performing procurement organizations operate at up to 21% lower labor costs (Source: The Hackett Group).
  3. According to Gartner, by 2023, organizations that have adopted AI in their supply chain management strategy will reduce errors by up to 50%. 

 

From the rollout of SAP Category Management to the enhanced supplier management and the integration of AI and machine learning, SAP is poised to redefine procurement and supply chain management. 

As procurement professionals, we must stay abreast of these developments, leverage these innovative solutions, and drive strategic value and business outcomes in our organizations. 

May 25

Navigating the Supplier Landscape

By Procurement No Comments

Unleashing the Power of SAP Ariba Solutions for Optimized Procurement and Risk Management

 

Supplier management has become a critical aspect of business operations for procurement and supply chain executives in interdependent businesses and complex supply chains.

In fact, according to a report by Ponemon Institute, 53% of organizations have experienced at least one data breach caused by a third party in the past two years. This statistic alone underscores the urgent need for robust supplier lifecycle and risk management.

Fortunately, innovative solutions are available to help professionals navigate this challenging landscape. For instance, SAP Ariba’s Supplier Lifecycle and Performance solution offers various benefits that help streamline supplier management and optimize procurement processes.

Enhancing Supplier Relationships

A strategic procurement process starts with strong supplier relationships. SAP Ariba solutions provide a unified and comprehensive view of supplier information, which helps businesses work effectively with suppliers and withstand disruptions. This increased visibility can drive spend to preferred suppliers, allowing businesses to manage suppliers based on specific parameters and integrate this information with other SAP Ariba solutions.

Maximizing Savings

SAP Ariba’s solutions can also help eliminate savings leakage. With enhanced visibility and control, businesses can ensure employees buy the right products at the right price, allowing negotiated savings to reach the bottom line.

Simplifying Risk Management

Understanding supplier risk is essential in today’s complex business landscape. 2021 data breaches increased by 17% from the previous year, and it’s predicted that supply chain attacks would quadruple in 2021 over the number of 2020 attacks. SAP Ariba’s Supplier Risk solution simplifies supplier risk management by providing actionable insight into high-risk suppliers and focused risk alerts.

Gaining Deeper Insight

With SAP Ariba Supplier Risk, businesses can act fast with insight into the location of at-risk suppliers, the problems they may face, and the orders and shipments impacted by risk. This solution also allows for intelligent control assessments based on suppliers’ inherent risk, enabling businesses to identify suppliers of greatest concern.

Driving Compliance with Embedded Risk Management

Embedding risk management in the procurement process can significantly improve compliance. SAP Ariba Supplier Risk helps reduce the assessment cycle time from months to weeks, improving compliance through third-party risk assessments for each supplier engagement.

Delivering Business, Environmental, and Social Impact

Businesses today are increasingly held accountable for their operations’ social and environmental impact. With SAP Ariba Supplier Risk, companies can find the causes of risk to enable compliance controls that make a difference and provide responsible plans for supplier selection, onboarding, and contracting.

Proactively Mitigating Risks

SAP Ariba Supplier Risk enables businesses to generate and execute issue management and action plans to mitigate risks proactively. This solution also connects to the source-to-pay process to improve compliance.

Receiving Personalized Risk Alerts

The SAP Ariba Supplier Risk solution automatically tracks more than 200 risk incidents, helping businesses proactively monitor financial, operational, environmental, social, regulatory, and legal risks.

In an era where 65% of businesses find it hard to manage cybersecurity risks associated with third parties and 74% believe that third-party vendor selection overlooks potential key risks, SAP Ariba Supplier Risk removes the challenge from supplier risk management. It empowers businesses to work with suppliers that can keep business moving with less risk, monitoring aspects of supplier lifecycle management that may not have been considered before.

The Future of Supplier Management

As businesses continue to evolve, so does the complexity of their supplier networks. An estimated 60% of organizations work with over 1,000 third parties, which is growing as business systems become more complex. Additionally, 71% of businesses expect to become more reliant on third parties in the next two years.

Given these trends, it’s clear that effective supplier lifecycle and risk management are more critical than ever. Advanced solutions like SAP Ariba’s Supplier Lifecycle and Performance and Supplier Risk solutions can help businesses navigate this increasingly complex landscape, enabling them to make better buying decisions, maximize savings, scale compliance, simplify risk management, and more.

With robust supplier management solutions, businesses can turn procurement and supplier management from a challenging task into a strategic advantage. By harnessing the power of SAP Ariba solutions, businesses can mitigate risks and unlock opportunities for growth and innovation. It’s time to reshape the procurement landscape and transform how we manage supplier relationships.

 

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May 16

Unleashing the Power of AP Automation: A Strategic Move Towards Efficiency and Profitability

By Procurement No Comments

In an era where digital transformation drives sustainable business growth, one area that remains ripe for disruption is Accounts Payable (AP). AP automation is no longer just an option – it’s a business necessity that yields considerable strategic advantages, particularly for mid-market companies. This post aims to provide an in-depth understanding of the myriad benefits of AP automation to executives committed to fostering operational excellence, reducing costs, and enhancing cash flow management.

 

The AP Challenge: A Time and Resource Intensive Process

AP processes often contain manual data entry, paper invoices, and lengthy approval cycles. These processes are time-consuming and prone to human error, resulting in late payments, missed discounts, and increased operational costs. The lack of real-time visibility into AP data often leads to suboptimal decision-making, hampering growth and profitability.

The AP Automation Advantage: Transforming the AP Landscape

AP automation technology disrupts this status quo, offering a more innovative, efficient, and cost-effective way to manage AP processes.

Let’s delve into the specific benefits:

  • Time Savings: AP automation drastically reduces the time to process an invoice, leading to faster approvals and payments. This increased efficiency frees up valuable staff time that can be better utilized for strategic tasks, such as analyzing spending data or improving supplier relationships.
  • Reduced Operational Costs: Automating AP processes reduces the need for manual intervention, thereby minimizing the scope for human errors and the costs associated with rectifying them. Moreover, it can also decrease storage and postage costs associated with paper invoices. Calculate your potential savings here using SAP’s Buying and Invoicing Value Calculator.
  • Enhanced Cash Flow Management: With real-time visibility into outstanding invoices and payment dates, AP automation allows companies to optimize their cash flow. Companies can take advantage of early payment discounts and avoid late payment penalties, thereby improving their bottom line.
  • Decreased Rogue Spend: AP automation controls maverick spending by enforcing corporate policies and approval workflows. It also improves spend visibility, enabling companies to identify and mitigate rogue expenditures more effectively.
  • Improved Supplier Relationships: Timely payments and transparent communication foster healthier supplier relationships. This enhances supply chain efficiency and opens up opportunities for negotiation and collaboration.

The Powerhouse Duo: SAP Ariba Buying and Invoicing and Premikati

While the benefits of AP automation are clear, the choice of software and its implementation process is crucial.

SAP Ariba Buying and Invoicing is a robust solution offering comprehensive AP automation capabilities. It streamlines end-to-end procure-to-pay processes, enhances visibility into company-wide spending, and drives compliance and control across the invoice management process.

Yet, the success of any AP automation initiative is about more than just the software. It’s about how effectively the software is implemented and integrated with your existing systems and processes. This is where Premikati offers rapid implementation and deployment services that ensure a smooth and efficient transition to automated AP processes.

Premikati’s expertise in SAP Ariba implementation reduces the time-to-value, allowing companies to experience the benefits of AP automation sooner rather than later. Their robust training and support ensure that your team is equipped to leverage the software’s full potential.

AP automation is a transformative strategy that can significantly improve your business’s operational efficiency, financial health, and competitive edge. With SAP Ariba Buying and Invoicing and Premikati’s deployment services, your business is well-positioned to navigate the AP automation journey successfully.

Connect with us today to talk to our team.

Mar 27

Best Practices to Master Buying and Invoicing

By Procurement No Comments

CFOs and CPOs face numerous challenges when managing to buy and invoicing processes within their organizations. Efficient financial management is crucial to maintain a healthy cash flow, reducing risk, and making data-driven decisions. In this blog post, we’ll explore the top ten pain points related to buying and invoicing from a financial perspective, along with best-in-class solutions and supporting statistics.

 

Manual Invoice Processing

One of the most time-consuming and error-prone aspects of financial management is manual invoice processing. Automating this process with AI-based tools can significantly reduce the time spent on processing invoices and improve accuracy. According to the Institute of Finance and Management (IOFM), organizations that have automated invoice processing report a 60-80% reduction in invoice processing time.

 

Inaccurate Financial Data and Reporting

Access to accurate, real-time financial data is essential for making informed decisions. Implementing real-time data analytics and reporting tools can help CFOs and CPOs to achieve greater insights and improve decision-making. Companies that use real-time analytics experience a 54% improvement in decision-making speed, according to the Aberdeen Group.

 

Fraud and Compliance Risks

Fraud and compliance risks can have severe financial and reputational consequences for organizations. Enhancing internal controls with fraud detection and compliance management systems can help mitigate these risks. The Association of Certified Fraud Examiners (ACFE) reports that companies with strong anti-fraud controls can reduce fraud losses by up to 50%.

 

Decentralized Procurement and Purchasing Processes

A decentralized procurement process can lead to inefficiencies, lack of visibility, and increased costs. Centralizing procurement with a comprehensive, cloud-based procurement platform can streamline operations and reduce expenses. The Hackett Group found that centralized procurement can reduce procurement costs by up to 20%.

 

Inefficient Vendor Management

Managing vendors effectively is crucial for maintaining strong relationships and ensuring optimal performance. Implementing a vendor management system with automated vendor onboarding and performance tracking can improve the efficiency of this process. Deloitte reports that companies with efficient vendor management experience 26% faster vendor onboarding times.

 

Lack of Spend Visibility

Gaining granular, real-time insights into spending is essential for cost control and strategic decision-making. Utilizing spend analytics tools can provide CFOs and CPOs with the visibility they need to make informed decisions. Gartner states that organizations that leverage spending analytics can achieve up to 15% cost savings.

 

High Invoice Error Rates

Invoice errors can lead to payment delays, strained relationships with suppliers, and increased costs. Adopting a smart invoicing system with built-in error detection and prevention can reduce invoice error rates significantly. Ardent Partners found that companies using smart invoicing systems can reduce invoice error rates by up to 37%.

 

Slow Approval Workflows

Lengthy approval workflows can delay payments and hinder cash flow management. Streamlining approval workflows with automated routing and escalation features can expedite the process. PayStream Advisors report that organizations that automate their approval workflows experience a 45% reduction in approval cycle times.

 

Difficulty Managing Cash Flow and Working Capital

Effective cash flow management and forecasting are vital for maintaining financial stability. Implementing cash flow management and forecasting tools with real-time visibility can improve accuracy and decision-making. PwC found that companies that use cash flow management tools can improve cash flow forecasting accuracy by up to 36%.

 

Ineffective Budgeting and Cost Control

Budgeting and cost control are integral to financial success. Adopting an integrated budget management system with real-time tracking and reporting can streamline these processes and provide better insights. The Financial Executives Research Foundation (FERF) reports that organizations that implement integrated budget management systems experience a 33% reduction in budgeting cycle times.

 

By addressing these pain points with best-in-class solutions, CFOs and CPOs can significantly improve their organizations’ financial performance, reduce risk, and enhance decision-making capabilities. These improvements will ultimately lead to a more efficient and effective buying and invoicing process, allowing organizations to thrive in a competitive business environment.

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Feb 16

Five Ways to Ensure your Sourcing Strategy Never Disrupts the Supply Chain

By Blog No Comments

Because sourcing is at the heart of any procurement strategy, it is critical to the success of your supply chain.

Poor sourcing strategies have a negative impact on the supply chain such as  downtime, low inventory, and a lack of supply chain transparency.

Here are five things you can do to protect your supply chain from disruptions:

1. Assemble the Right Team

It goes without saying that your supply chain requires people to function. More importantly, it requires the right people.

Consider the following when assembling your sourcing team; such as the ability to quickly learn, analyze large amounts of data, build long-term relationships, communicate, and negotiate.

2. Provide the Right Tools

In today’s supply chain climate, your productivity depends on the tools you make available to your team and the tools and solutions they have at hand can make all the difference.

With emerging technologies across the globe, the supply chain has never had the potential to be more efficient. 

A great example of a sourcing solution is SAP Ariba’s Sourcing tool.

3. Have a Solid Sourcing Strategy

Your sourcing strategy is used to find the most effective, efficient, and reasonably priced solution to your supply chain needs.

So, how do you identify the right product or supplier?

Here are some tips:

  • Understand the market trends. 
  • Always pick quality and time over price. 
  • Build relationships with several vendors in the market. 
  • Have clear expectations or targets. 

4. Have Multiple Vendors for Each Product Supplied

Building long-term relationships with your vendors or suppliers is extremely beneficial to the supply chain. However, if the pandemic taught us anything, it’s the importance of having backup plans.

Supply chains are more flexible, visible, and resilient than ever before. Despite this, there is still an element of uncertainty surrounding supply chains.

To be better protected, it is critical to work with more than one supplier. A great place to start is the Ariba network where over you can connect with over 40 million suppliers and growing!

5. Constantly Review Suppliers

A supplier review provides insight into the supplier’s performance.

Constantly reviewing a supplier ensures that potential disruptors are identified as soon as possible; giving you the opportunity to prevent them from causing harm to the supply chain.

To get the most out of your supplier’s performance, make a list of performance indicators. Quality, service, delivery rate, damages, compliance, innovative ideas, and cost are some examples.

Summary

Disruptions in the supply chain are undesirable. It’s not just that they cost the company time and resources, though those are significant. The unfavorability stems from the impact on the company’s customers.

What are some common disruptions in your supply chain?

One of your primary responsibilities as a supply chain or sourcing manager is to prevent disruptions. Particularly artificial disruptions. One of the most effective approaches is to develop an effective sourcing strategy.

For your procurement solutions and services, click here at www.premikati.com

Feb 16
Supply Chain Management SAP Ariba Premikati

Tips for Successful Supply Chain Management

By Procurement No Comments

Sourcing and supply chain management go hand in hand.

Successful supply chain management is the backbone behind most successful businesses. If we had any doubt, the last three years made it clear.

Here are four pointers to help you ensure the success of your supply chain and how you can manage your relationships for success:

1. Leverage New Technologies

Today’s supply chain industry is brimming with new technologies and it has never been easier to get the most out of your supply chain using tools such as:

I. Artificial intelligence and predictive analytics to aid in inventory forecasting.

II. Procurement applications such as SAP Ariba SLP.  This aids in quality control, supplier scorecards, supplier management and cost savings during procurement.

III. Digital supply chain twins, which improve transparency and decision-making in the supply chain.

2. Constant Evaluation of Sourcing Strategies and Suppliers

The focal point of any supply chain management is sourcing. If done incorrectly, it could spell the end of many supply chains.

Take, for example, this Gartner study.

74% of companies that constantly reviewed and developed their sourcing strategies increased their productivity and savings significantly.

It really is a no-brainer.

To get the most out of your sourcing, figure out which strategies work best for your supply chain and focus on them. You should concentrate on the suppliers’ credibility, capacity, and shared goals.

3. Employee Development

Employees, like other aspects of the business, make significant contributions to supply chain management. In a nutshell, they are the foundation of any organization.

It only makes sense to invest in their advancement. Especially if you want your supply chain management to succeed.

When it comes to training their employees, most businesses are afraid. They are concerned that they will leave and join their competitors. It’s understandable.

But wouldn’t it be more dangerous not to train them? And then watch them wreak havoc on the supply chain and overall business objectives?

Employee competencies are improved through training and development.

4. Enjoy the Competition

Competition is the backbone of any thriving industry. To see success in your supply chain, you must learn to enjoy the competition. 

 Why? The simple answer is competition breeds innovation. And innovation is the secret weapon of any successful business. 

 With competition, you can isolate a competitive edge, allowing you to better cater to your customer’s needs.  

 It also has benefits like improved customer service and constant business development.  

 

What are the key issues you encounter in your supply chain organization?

 

For procurement and supply chain management consultations from the global leaders in Ariba solutions please visit us at www.premikati.com.

Jan 12
Premikati SAP Ariba 2023 Procurement Trends

2023 Procurement Trends

By Procurement No Comments

Procurement in 2023 

The procurement landscape is constantly changing, and the strategies that organizations employ to ensure their success in the future must evolve to meet the needs of the modern market. As we look at 2023 and beyond, it’s important to consider the trends that will shape the way companies manage their procurement operations. 

Technology and Automation  

The first trend is the increasing use of technology in procurement. Automation and artificial intelligence are becoming more prevalent in procurement processes, allowing companies to reduce costs, improve efficiency, and increase accuracy. Automation and AI will also help companies to better manage their supply chains and make smarter decisions when it comes to sourcing and purchasing materials.  

Sustainability 

Another trend is the increasing focus on sustainability. Companies will be looking for more sustainable suppliers and will be using the latest technologies to measure and optimize their sustainability efforts. Organizations will also need to pay more attention to their supplier relationships, as well as their own internal practices, to ensure that their procurement strategies are as sustainable as possible. 

AI Implementation 

One of the most significant procurement trends for 2023 will be the increased use of artificial intelligence (AI). AI will allow businesses to automate many of the mundane tasks involved in procurement, such as data entry, document management and order processing. This will free up valuable resources and allow companies to focus on more strategic activities. AI will also enable companies to better understand their customers’ needs, allowing them to make informed procurement decisions that are tailored to their customers.  

Procurement Digitization 

Another key trend will be the move towards digital procurement. This involves the use of online platforms to purchase goods and services, as well as manage supply chains and contracts. By taking advantage of digital tools, businesses will be able to streamline their procurement processes and reduce costs. In addition, digital procurement will enable businesses to better manage their supply chains and track their suppliers. This will allow them to identify opportunities for cost savings and ensure that their suppliers are meeting their expectations. 

Change in 2023 

As businesses become more competitive and the economy continues to change, companies must find new ways to stay ahead of the competition. One of the most effective ways to do this is through effective procurement strategies. By understanding the needs of the company, the market, and the competition, businesses can create a procurement strategy that will help them get the most out of their purchases.  

 

Jul 12

Contract Cubes for Private Equity

By Private Equity No Comments

Contract Cubes For Private Equity Firms

 

Contract Cubes Offer Powerful Advantages For Private Equity Firms

Successful private equity firms know that time is something you want to have on your side. When you’re looking at supplier contracts across multiple portfolio companies, then all of your procurement and contract management habits—whether time efficient or not—become greatly magnified.

PE firms that are able to compound on good contract management skills (and good software) have a massive competitive advantage over private equity firms that are still stuck in data siloes, spreadsheets, or, worse, completely analog procurement records.
SAP’s “contract cubes” are a game changer for data-centric PE firms because of their straightforward approach to accessing contract data near-instantaneously. Here are just a few of the powerful features of contract cubes that PEs can harness to supercharge the combined power of procurement across all of their portfolio companies: 

Use Keywords To Make Better Choices Spanning Your Entire Portfolio

Even disparate portfolio companies often have areas in which they can join forces to negotiate better deals with suppliers or, in some ideal scenarios, offer sourcing amongst themselves. It becomes exponentially easier to get discounts for quantity by combining orders or to find hidden gems amongst suppliers if your database of contracts is centralized and readily searchable. Find the things portcos are buying separately through a simple search and then turn that data into cost savings or even revenue generation while other firms are still flipping through file cabinets. 

Get All of The Numbers On The Table

Data transparency and visibility go a long way toward making better choices in both the short and long term. It’s impossible to capitalize on things that you don’t know are happening. With contract cube functions, you can get all of the numbers you need via simple commands. That can include time left until contract renewals, numbers of orders, financial ratios and other history and stats which can be transformed into even greater savings, revenue gen, and better supplier relationships.

The ability to know who your best-value suppliers are is priceless. Contract cubes can help you determine this based on your own metrics of value (and across a variety of metrics). Prioritize these suppliers during contract renewals, bring them additional business, set up data sharing, and make generally better choices that are data-led. 

Additionally, use data easily pulled via contract cubes to gain insight into long-term financial trends, even as portcos come and go, so you have a big-picture view that can lead big vision (and big money) moves while competitors are still taking a myopic and segregated approach to procurement, leaving you with a clear advantage. 

Handling procurement for a private equity firm is among the most difficult scenarios for even the most seasoned procurement expert who has been working with individual companies. That’s why we at Premikati offer BPO with managed services in procurement catering expressly to private equity firms. We understand how to navigate the complexities of cross-portfolio sourcing and we have the tools and expertise to fully manage this process to the great advantage of the firms who choose to outsource to us. Our specialized knowledge and toolsets bring value to the table that would go entirely unrealized by teams with less pointed expertise.

Reach out to us today to see how we can help you advance your procurement strategy.

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