What is your business’s procurement strategy? For many businesses, procurement is still a hands-on process, and that approach is holding companies back, slowing down the process and introducing unnecessary costs. No, the right way to do procurement in today’s business ecosystem involves investing in smarter software for managing these systems, including AI predictions, risk management, and improved contracting. There are so many variables in the procurement process that a tech-forward approach is the only way to keep up.

If your business is still struggling to adopt modern procurement systems, it’s time for a budget check. You’re almost certainly overspending on procurement, but if you can learn to spend smarter by emphasizing data systems, you’ll quickly reap the benefits.

Let Procurement Professionals Lead

Investing in the right procurement technology isn’t just about buying the newest software. If you think back to the bugs in the first Apple Watch, for example, it was an exciting but glitchy innovation and those who waited to buy were rewarded. Given the challenges of developing an investment strategy for your procurement market, it’s best to let a procurement specialist determine what you need. Procurement specialists are different from accountants, though, so don’t be surprised if, as a small business, you need to bring one on board as a consultant.

Procurement specialists don’t focus on cash flow so much as on system optimization and data analysis – and the software they choose often does many of those same things. For example, Ariba’s strategic sourcing software evaluates supplier data to help businesses understand spending distribution and optimize those distributions using feedback loops and by instigating competition among suppliers. Such systems also improve cash flow, but they do so indirectly, through an emphasis on supply chains.

Risk And Communication

Another key element that your business needs to consider when selecting procurement system technology is communication, specifically how your business connects internally and with outside suppliers. In some cases, this may require two separate systems, such as an enterprise collaboration system for internal communications and a CRM system or similar system for external communications. Your communication system is critical to your risk management infrastructure because it can also store important documents like contracts and invoices in the event of a dispute.

While smart communication can minimize business risk, a well-constructed procurement system can also help you evaluate your business’s risk appetite, a newer concept in supply chain management that looks at issues of agility, competition, and profit. In practice, that might mean trying to decrease costs and grow profits by working with a less reliable supplier or attempting to pivot or launch a new service with decreased preparation based on industry predictions. While many businesses are risk averse, balancing that protective impulse with a willingness to test market conditions under the right circumstances can give your business a real advantage.

The Future Of Digital Procurement

The more developed your digital procurement systems, the more automated they’ll be yielding greater time and cost efficiencies. More strikingly, such programs will increase in importance over the coming years as businesses grapples with the uncertainty of ecological disasters on the supply chain, political or worker disruptions, and other crises. Advanced procurement AI can predict these sorts of disruptions and allow companies to reroute shipments, prepare for losses, or negotiate around project delays. The bigger your company grows, the greater the potential losses.

There’s nothing simple about procurement systems, but the technology is emerging to stabilize these structures. To protect your business, you need to embrace scalable structures early on so that your systems are prepared to manage your growing responsibilities. Your clients are relying on you.