Differences in Sourcing, Contract, and Managing Different Types of Technology

Differences in Sourcing, Contract, and Managing Different Types of Technology

Authors:
Srimathy Mohan, Associate Professor, ASU
Mohan Gopalakrishnan, Sr Associate Dean of Academic Affairs and Professor, ASU
Brett Duarte, Associate Clinical Professor of SCM, ASU

 

The digitization of procurement has brought about significant advancements in the way companies manage their supply chain and vendor relationships. Procurement technologies enable companies to harness valuable data, enforce compliance, track spend, and improve operational performance. This digital transformation includes specialized technologies that address various issues such as spend management, supply risk, business continuity, and supplier relationship management.

Adoption of Cloud Services and Point Solutions

Organizations have increasingly adopted point solutions through cloud services, including software, platform, and infrastructure-as-services (SaaS, PaaS, and IaaS), as well as in-house ERPs and home-grown software to enhance the resilience of the overall supply ecosystem. However, the proliferation of disparate point solutions has made the digital integration of buyers and suppliers challenging.

Research Focus: Evolving Technologies for Sourcing and Contracting

To address this, a CAPS new research paper focuses on evolving technologies for sourcing and contracting and the ecosystem under which these technologies function effectively. The study utilized a three-pronged approach, including a detailed literature survey, an executive survey, and interviews with chief procurement officers (CPOs).

The literature analysis revealed that cloud-based technologies, such as Coupa, streamline collaboration in the procurement ecosystem by replacing or augmenting legacy workflow processes. Additionally, SaaS, PaaS, and IaaS service models offer firms flexibility, scalability, and cost-effectiveness. SaaS, in particular, is frequently used to access procurement solutions and offers effective integration with existing ERPs through APIs. Moreover, technologies such as artificial intelligence (AI), robotic process automation (RPA), blockchain, and advanced data analytics using machine learning tools are being leveraged to enhance procurement performance.

Insights from Procurement Leadership

Empirical research, including surveys of procurement leadership, highlighted that companies use multiple point solutions for various procurement areas. SaaS has emerged as the preferred method for procuring and integrating software, with Coupa, Ariba, JAGGAER One, Basware, and GEP being commonly used software. In-house solutions are predominant in analytics and are typically within the realm of ERP systems. Amazon and Microsoft serve as platforms and infrastructures for hosting, building, and integrating software from cloud services.

CPOs from the detailed interviews emphasized that digital procurement systems have revolutionized business operations and increased the need for predictive and prescriptive data analytics capabilities. Companies are leveraging their current ERP systems with predominantly SaaS-based tools to achieve integration between advanced digital capabilities and supplier systems.

Selecting the Right Cloud-Based Technology

Selecting the right technology for cloud-based services depends on factors such as ease of execution, integration and deployment, service and support, cost, and industries serviced. The full research report offers a detailed playbook comparing popular advanced software tools and addresses integration challenges such as unstandardized interfaces, scalability issues, and the need for training to improve awareness and acceptance of new technologies.

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CAPS is a B2B nonprofit research center serving supply management leaders at Fortune 1000 companies. CAPS Research inspires leaders with profound discovery and executable strategies to shape the future of supply management. Research reveals the destination, benchmarking charts the course, and networking creates the path to transformation. All CAPS offerings are sales-free, bias-free, and practitioner-driven. CAPS was established in 1986 at the W. P. Carey School of Business at Arizona State University in partnership with the Institute for Supply Management. Learn more at www.CAPSResearch.org.