To paraphrase Mugatu from the movie Zoolander: “Intake and orchestration. So hot right now!”
In the rapidly evolving world of procurement, technology is playing an increasingly central role in transforming how businesses source, manage, and optimize their supply chains. The procurement platform stack is no longer limited to a single solution. It encompasses various tools, each serving a specialized purpose in supplier management, risk assessment, contract lifecycle management (CLM), and sustainability.
When I joined procurement in 2004, you could count the number of standardized procurement applications. It was mostly ERPs with a combination of inbuilt tools to suit the company’s needs. Over the years the technology stack has exploded and the intricate web of technology solutions now available, as depicted in the Modern Procurement Platform Stack diagram from Dr. Eloise Epstein below, has made data visibility across the enterprise a nightmare. And this version of the diagram doesn’t even include CLM!! Companies buy the niche technology for its effectiveness but usage deteriorates primarily due to users not willing to go to multiple applications to perform their daily jobs.
SOURCE: Dr. Eloise Epstein on LinkedIn
This plethora of technology underscores the need for orchestration— a powerful, unifying strategy that ensures these tools work in harmony, enabling seamless data integration and maximizing the efficiency of procurement operations.
The Importance of Procurement Orchestration in a Complex Landscape
Over the last two decades, the technology landscape in procurement has expanded into a wide array of niche solutions, each focusing on specific procurement needs. From supplier management platforms like Bonterms and Fairmarkit to risk assessment tools like SecurityScorecard and EcoVadis, procurement professionals now have an arsenal of technologies at their disposal. However, this fragmented environment can quickly become overwhelming, leading to inefficiencies, data silos, and suboptimal use of these valuable tools.
Procurement orchestration addresses this complexity by serving as the connective tissue between different procurement systems, ensuring they all work together toward a common goal: streamlining operations, improving decision-making, and maximizing value from suppliers and contracts. Rather than treating each solution as a standalone tool, orchestration acts as the backbone, integrating various platforms to form a cohesive procurement ecosystem. This connected environment is crucial for both operational efficiency and strategic decision-making. It can serve as the unifying factor and along with GenAI become a standard simplified UX allowing users and procurement teams alike to harness the full capabilities of the procurement suite.
Enhancing the Procurement Experience
Procurement has been traditionally considered a roadblock in the purchasing process of any organization. With orchestration, procurement’s real value can be brought out effectively. With orchestration, procurement teams can:
- Access Unified Data: Orchestration ensures that data from different systems—spend analytics, supplier performance, invoices, or risk metrics—flows seamlessly across platforms. This integration eliminates data silos and enables procurement professionals to gain a 360-degree view of their operations.
- Streamline Processes: Instead of jumping between multiple tools, procurement orchestration provides a unified interface that allows users to manage contracts, and supplier performance, and handle their intake and risk through a single platform. This not only saves time but also reduces the learning curve for procurement teams.
- Automate Routine Tasks: Through orchestration, procurement teams can set up automated workflows for tasks like purchase order approvals, supplier onboarding, and contract renewals. These automations enhance productivity by freeing up human resources to focus on more strategic tasks.
Maximizing the Correct Usage of Tools
One of the challenges in today’s procurement landscape is ensuring that the myriad of tools available are being used to their full potential. Using procurement orchestration, we can standardize the use of technology across the organization. Here’s how:
- Ensuring Consistency: Orchestration enforces best practices, ensuring that procurement teams follow a consistent process across all tools. This consistency improves compliance and reduces the risk of errors.
- Optimizing Workflows: By integrating tools, orchestration allows procurement teams to create optimal workflows that take advantage of the best features of each tool. For example, a supplier onboarding process might start with risk assessment in one tool, proceed to contract management in another, and finally link to payment processing, all in a seamless manner.
- Mining Data Across Applications: With procurement orchestration, data from various applications can be collected and analyzed in real time. This unified data stream provides valuable insights that procurement teams can use to optimize supplier relationships, mitigate risks, and make data-driven decisions.
Procurement Orchestration as the Foundation for Generative AI
Procurement orchestration doesn’t just streamline current operations; it sets the stage for the future of procurement, particularly in the area of generative AI. As procurement becomes increasingly data-driven, orchestration helps lay the groundwork for AI to automate routine tasks, enhance decision-making, and drive strategic initiatives.
- Automating Simple Tasks: Generative AI can be trained to automate repetitive, low-value tasks such as processing invoices, generating RFPs, and monitoring supplier performance. Procurement orchestration provides the structured workflows and data integration necessary for AI to take over these tasks, ensuring they are completed quickly and accurately.
- Improving Decision-Making: AI-powered insights can help procurement teams make better decisions about supplier selection, risk management, and contract negotiations. Orchestration ensures that AI has access to accurate, real-time data from across the procurement ecosystem, allowing it to generate actionable recommendations.
- Data-Enriched AI Models: By orchestrating procurement data, businesses can build robust AI models that continually learn and improve. Whether predicting supply chain disruptions or identifying new savings opportunities, the AI’s decision-making capabilities become significantly more powerful when backed by a well-orchestrated, integrated system.
IMAGE SOURCE: Kearney (2018) The Future of Procurement
In the last few years, I have seen this technology stack diagram of the future explode into the complex landscape it is today. It’s almost become a DNA of the procurement process. It’s a necessity for any organization and not just a luxury. By uniting the diverse range of tools available, ensuring seamless data integration, and providing a foundation for future AI-driven automation, orchestration enables procurement teams to achieve greater efficiency, make better decisions, and unlock the full potential of their technology stack.
