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Cloud solutions offer a quick route to value

Leadership procurement technologyTalent and Leadership

Procurement is becoming more sophisticated as the pursuit of new ways of extracting value for corporations is becoming increasingly complex. Procurement initiatives around demand management, cost structure transformation, and product/brand impacts are being added on top of the traditional strategic sourcing. More sophisticated approaches call for ever more data, insight and automation to yield a strong ROI.


This tendency is fuelling new needs in procurement technology, which is quickly moving beyond the core source-to-pay suites. The realisation of the complete source-to-pay suite of technology is becoming ever more elusive, as companies discover new areas to automate and the pressure on costs (e.g. quick roll-outs) increases.


More procurement organisations are going to BPO providers for Saas-based solutions in niche services and P2P platforms. This is because they are seeing the value of a one-stop-shop for technology needs as the cost for maintaining in-house expertise across an array of specialist areas is becoming prohibitive.


Procurement BPO providers are increasingly investing in cloud-based technology to close the gaps. In order to do this they are either partnering with technology providers or building their own solutions. Here are some examples:



The latest solutions address Cost Structure Transformation by building in automated TCO modelling in your spend data sets. This provides up-to date insight into your cost structures by category and allows you to make informed adjustments to strategy or influence demand.


Supplier Risk Management

Solutions that can pull in external data to help you assess Supplier risk is easy to set-up in addition to a cloud based analytics solution. Companies use this today for Financial and Sustainability profiling.


Savings Management

Very few companies master the three-way savings management process between finance-procurement-Budget owners. This failure engenders significant loss of value and lack of sight on procurement performance.



Speed to market is key to supplier innovation. New ‘cloud’ based applications allow procurement professionals to quickly set-up new processes which enable internal teams and strategic suppliers to come with new ideas and develop workable concepts.


Philip Allouche is global head of procurement solutions at Xchanging.


This post is taken from Xchanging’s regular column in Procurement Leaders Magazine.

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