Top 4 Trends and Practices in Digital Procurement Today

The world of digital procurement is always changing. As technology improves, organizations' purchasing teams, suppliers and other industry stakeholders find themselves adapting to changing standards and new efficiencies almost every day. It can be hard to keep up with all of them, but these four must-know trends and practices will ensure your organization is positioned to lead instead of react, foster a greater sense of inclusion, and save time and costs down the road.

Supplier diversity

At its core, supplier diversity is "a business strategy that ensures a diverse supplier base in the procurement of goods and services for any business or organization." It emphasizes the creation of a diverse supply chain that works to secure the inclusion of diverse groups in the procurement plans for government, not-for-profits and private industry.

A diverse supplier is a business that is owned and operated by an individual or group that is part of a traditionally underrepresented or underserved group. Examples include small-business enterprises, minority-owned business enterprises, and woman-owned business enterprises. Diverse suppliers are certified through third-party certification and membership agencies, such as the Canadian Aboriginal and Minority Supplier Council, Women Business Enterprises Canada Council and the Canadian Gay & Lesbian Chamber of Commerce.

Supplier diversity brings significant benefits to not only the traditionally disadvantaged supplier communities, but for buyers who bring a supplier diversity mindset when purchasing goods and services. These benefits include:

Lowering supply chain risk
Promoting innovation and new talent
Lowering costs and gaining more leverage in spend
Gaining stronger positioning to compete in international markets
Increasing public accountability and fostering an equitable approach
Creating intentional economic growth for all communities
Aligning with social responsibility and sustainability mandates

Learn more about supplier diversity programs and how to create an effective program that works for your procurement team.

Incorporating a truly end-to-end system

In addition to the many advantages digital procurement systems bring, such as streamlined bid management and evaluation, contract management, more compliant bids, reduced spend and significant time savings, more and more platforms are incorporating features that truly make them end-to-end.

From the moment a bid is drafted and released to the moment that a supplier is awarded the opportunity and work begins, more can be done within a single, centralized and integrated system, and better workflow efficiencies are possible for all stakeholders.

For example, some of bids&tenders' latest features, including Award Approval and Contract Builder & eSignatures, seek to build on this idea and truly bring the end-to-end concept to life. With Award Approval, buyers can better automate their internal award approval process through improved document circulation and tracking. Stakeholders involved in the award can simply be sent an email generated by bids&tenders, view the awarded opportunity and provide their approval from a link in the email. Everything needed to complete the award process can be performed through the system.

Using Contract Builder & eSignatures, organizations will be able to build contracts within the system and authorize them with digital signatures. Once a vendor is selected for an opportunity, all parties are able to fully sign and execute the contract entirely online and within the platform.

Learn more about contract management on bids&tenders and tips on managing supplier performance for successful contracts.

Infusing digital procurement beyond purchasing teams

While there are clear, obvious benefits to organizations' purchasing departments using digital procurement systems to better conduct business and efficiently procure goods and services, it's also worthwhile to expand the use of these systems beyond the department to the rest of the organization!

Often, many different teams and other departments within a single organization have their own needs and priorities. Sometimes, these employees don't need to immediately involve their procurement department when exploring the fulfillment of an opportunity, especially if the budget for the opportunity does not exceed a certain threshold. The ability for all members of an organization to use and work from the same digital procurement platform when purchasing and seeking quotes helps vastly streamline and improve internal knowledge sharing, communication and purchasing processes so that all team members are working from the same playbook and speaking the same language. This also brings enhanced visibility and a holistic view of the organization's overall purchasing activity.

Through focused education and training, such as informative webinars and recordings, online instructions, experimenting in sandbox environments, and of course, intuitive platforms, leveraging a single digital procurement system for all departments' purchasing activities only boosts the cohesiveness of employees in multi-faceted and multi-structured environments.

Discover more about how to work effectively with internal teams when performing procurement.

Comprehensive data collection and reporting

Aside from enabling better, more compliant bids and streamlining the end-to-end procurement process, digital procurement systems also shine in data collection and reporting. Long gone are the days with filing cabinets and stacked boxes full of binders and years of paperwork. Now, valuable information is not only virtually collected and stored, but analyzed with actionable insights.

As ProcureCon Europe notes in a recent report, spend analysis is the most popular automated procurement process among its survey respondents, with 66 per cent using platforms that compile, classify and clean supplier spend information. In the data, Rowan Lemley, Head of Product Marketing at OpusCapita states, "It doesn't surprise me at all that spend analysis is the most commonly used element within the procurement process, as the goal of modern procurement is to get 100 per cent of spend under management ̶ and continue to optimize. To optimize, you need data." Additionally, 75 per cent of chief procurement officers surveyed reported that they are already using predictive analytics, and 25 per cent report that these analytics will be most useful in the future.

In its report titled "The Future of Procurement in the Age of Digital Supply Networks", Deloitte shares this assessment, stating that "Digital procurement solutions are allowing for many more physical and digital inputs to be connected, driving better decision-making and improving efficiency, and ultimately producing results in the form of improved insights and strategies, leading to accelerated cost leadership."

Data-driven decisions are especially prevalent with bids&tenders users. Procurement professionals can easily build custom reports or use a Report Library of existing reports, build custom dashboard views specific to an individual's responsibilities, view online supplier databases, and view and download reporting on the history of suppliers associated with their organization.

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Contact us to find out how you can level up your procurement and stay on top of the latest trends and practices with one of the most dependable and agile digital procurement platforms in the world, bids&tenders.

What is the role of contracts in the procurement process?

Contracts serve as legally binding agreements that outline the terms and conditions of a procurement transaction. They define the rights, obligations, and responsibilities of both the buyer and the supplier. Contracts provide a framework for managing expectations, resolving disputes, and ensuring compliance with procurement policies.

How do contracts support effective procurement management?

Contracts support effective procurement management by:
Establishing clear expectations: Clearly defining the scope of work, deliverables, timelines, and payment terms.
Managing risks: Identifying and mitigating potential risks through contract provisions.
Protecting the organization's interests: Ensuring that the organization's rights and interests are protected.
Providing a legal framework: Establishing a legal basis for resolving disputes and enforcing obligations.
Supporting performance management: Providing a benchmark for evaluating supplier performance.

What are the key elements of a procurement contract?

Key elements of a procurement contract typically include:

Parties: Identification of the buyer and supplier.
Scope of work: Detailed description of the goods or services to be provided.
Price and payment terms: Agreed-upon pricing, payment terms, and invoicing procedures.
Delivery terms: Specified delivery dates, locations, and acceptance criteria.
Warranties and guarantees: Provisions regarding product quality, warranties, and guarantees.
Confidentiality: Clauses protecting confidential information.
Dispute resolution: Mechanisms for resolving disputes, such as arbitration or mediation.
Termination provisions: Conditions under which the contract can be terminated.

How can businesses ensure compliance with procurement contracts?

Businesses can ensure compliance with procurement contracts by:

Establishing contract management processes: Implementing procedures for creating, reviewing, and managing contracts.
Training staff: Providing training to employees involved in procurement and contract management.
Regularly reviewing contracts: Periodically reviewing contracts to ensure they remain relevant and enforceable.
Monitoring performance: Tracking supplier performance against contract terms.
Conducting audits: Conducting regular audits to identify and address non-compliance issues.

What are the common challenges in contract management during procurement?

Common challenges in contract management during procurement include:

Incomplete or inaccurate contracts: Contracts that do not adequately address all relevant terms and conditions.
Lack of standardization: Lack of standardized contract templates and processes.
Difficulty in negotiating terms: Challenges in negotiating favorable terms with suppliers.
Contract disputes: Disagreements between the buyer and supplier regarding contract terms or performance.
Non-compliance: Failure of either party to adhere to contract obligations.

What is procurement system software, and why is it important?

Procurement system software is a comprehensive solution that automates and streamlines the entire procurement process, from requisition to payment. It is important for organizations seeking to improve efficiency, reduce costs, and enhance compliance.

How does procurement system software automate purchasing tasks?

Procurement system software automates purchasing tasks by:

Centralizing information: Providing a single repository for all procurement-related documents and data.
Automating workflows: Automating routine tasks like requisition processing, bid evaluation, and invoice approval.
Enhancing visibility: Providing real-time visibility into the procurement process, enabling organizations to track spending, identify bottlenecks, and make data-driven decisions.
Improving compliance: Ensuring adherence to purchasing policies and regulations through built-in controls and audit trails.
Facilitating collaboration: Enabling collaboration between procurement teams, suppliers, and stakeholders through online tools and communication channels.

What are the key components of procurement system software?

The key components of procurement system software include:

Requisition management: Streamlining the requisition process through online forms and automated approvals.
Sourcing and bidding: Managing sourcing events, evaluating bids, and awarding contracts.
Contract management: Managing contracts, tracking performance, and ensuring compliance.
Invoice processing: Automating invoice capture, validation, and approval.
Supplier management: Maintaining supplier information, managing contracts, and evaluating performance.
Reporting and analytics: Providing comprehensive reporting on procurement activities to support decision-making.

How does procurement system software ensure compliance and transparency?

Procurement system software ensures compliance and transparency by:

Enforcing rules: Incorporating policies and procedures into the system's workflows, ensuring that all steps of the procurement process adhere to regulations.

What is quote procurement, and how does it work?

Quote procurement is the process of obtaining and evaluating quotes from multiple suppliers for goods or services. It involves:

Defining requirements: Clearly outlining the specific needs and specifications of the goods or services to be procured.
Issuing a request for quotes (RFQ): Sending out the RFQ to potential suppliers, requesting them to submit their best price and terms for providing the required goods or services.
Evaluating quotes: Comparing and analyzing the received quotes based on various criteria, such as price, quality, delivery time, and supplier reputation.
Selecting a supplier: Choosing the supplier that offers the best value proposition based on the evaluation criteria.
Negotiating terms: Negotiating the final terms and conditions of the contract with the selected supplier.

How does the quote procurement process benefit an organization?

The quote procurement process benefits organizations by:

Ensuring competitive pricing: Obtaining quotes from multiple suppliers can help secure the best possible price for goods or services.
Identifying quality suppliers: Evaluating quotes based on quality, delivery time, and other criteria can help identify reliable and capable suppliers.
Improving efficiency: Streamlining the procurement process and reducing the time required to source goods or services.
Enhancing transparency: Providing a transparent and competitive process for selecting suppliers.
Supporting compliance: Ensuring compliance with procurement policies and regulations.

What is the difference between quote procurement and tendering?

While both quote procurement and tendering involve obtaining bids from multiple suppliers, there are some key differences:

Complexity: Tendering is typically used for more complex procurement projects, while quote procurement is often used for simpler purchases.
Evaluation criteria: Tendering often involves a more rigorous evaluation process, considering factors such as technical capability, experience, and financial stability in addition to price.
Legal requirements: Tendering may be subject to specific legal requirements, such as public procurement regulations, while quote procurement may be more flexible.

How do organizations request and evaluate quotes during the procurement process?

Organization can request and evaluate quotes by:

Issuing a clear RFQ: Clearly specifying the requirements, delivery terms, and evaluation criteria in the RFQ.
Sending the RFQ to potential suppliers: Distributing the RFQ to a selected group of suppliers.
Setting deadlines: Establishing clear deadlines for submitting quotes.
Evaluating quotes: Comparing quotes based on price, quality, delivery time, and other relevant factors.
Using scoring systems: Implementing scoring systems to objectively evaluate quotes and select the best supplier.

What are the key factors to consider when choosing a supplier through quote procurement?

Key factors to consider when choosing a supplier through quote procurement include:

Price: The cost of the goods or services.
Quality: The quality of the products or services offered.
Delivery time: The ability of the supplier to deliver goods or services on time.
Supplier reputation: The supplier's track record and reputation in the industry.
Financial stability: The supplier's financial health and ability to meet obligations.
Experience: The supplier's experience in providing similar goods or services.
Customer service: The supplier's customer service capabilities and responsiveness.

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