Procurement Orchestration: Transforming Supplier Management for the Modern Enterprise

A recent Spend Matters webinar, "The Power of Orchestration in Supplier Management," explored the concept of procurement orchestration and its profound impact on supplier management. Featuring insights from Spend Matters analysts Pierre Mitchell and Bertrand Maltaverne, Piotr Pierzak from Novartis, and Sudhir Bhojwani, CEO of ORO Labs, the webinar illuminates how orchestration is revolutionizing supplier onboarding and maintenance processes.

Procurement Orchestration Beyond Intake

At its core, procurement orchestration is a strategic approach that empowers Chief Procurement Officers (CPOs) to effectively manage and collaborate with internal stakeholders and third parties across the enterprise. Pierre Mitchell emphasizes this, stating, "CPOs are really CEOs, ‘Chief Externalization Officers,’ to help orchestrate third parties with the enterprise. This involves aligning people, processes, and data to drive value and efficiency in procurement, extending beyond traditional cost-saving measures to encompass broader enterprise goals.” Given this expanded role, as well as the tremendous complexity involved in enterprise business systems, CPOs cannot do it alone. Instead, they need assistance from procurement orchestration platforms, like ORO, to help them realize their potential as ‘orchestrators of value.’

Within procurement, intake and orchestration are often confused as if they are one and the same.  Increasingly, however, the industry is coming to realize that intake is just one orchestration use case among others. This webinar serves as an important corrective, noting the tremendous potential of orchestration to improve supplier onboarding, maintenance, and related risk processes.  

For example, webinar guests highlighted several significant challenges that organizations face in traditional supplier management:

• Siloed Systems and Processes: Disconnected internal systems and processes create confusion, inefficiencies, and maverick buying, hindering effective collaboration and spend management.
• External Volatility: The current business landscape, characterized by volatility, uncertainty, complexity, and ambiguity (VUCA), presents challenges for procurement in ensuring supply continuity, controlling costs, and mitigating risks.
• User Experience: Cumbersome procurement processes often lead to poor user experience, impeding collaboration and adoption of preferred procurement channels.

Procurement orchestration offers a solution to these challenges. It breaks down silos and fosters seamless collaboration across internal functions and external partners. Bertrand Maltaverne highlighted this, noting, "It's not just about tech, you know. It's also about people and processes." Orchestration automates manual tasks, enhancing efficiency, ensuring compliance, and freeing up procurement professionals to focus on strategic activities. It provides real-time visibility into supplier information and risks, enabling data-driven decision-making and agile responses to changing market conditions. And it simplifies processes and provides user-friendly interfaces and self-service opportunities to improve the experience for both internal stakeholders and suppliers.

Within the context of supplier relationship management, two specific use cases stand out: (1) supplier onboarding and maintenance and (2) risk management. With respect to the former, orchestration tools like ORO centralize supplier data, automate onboarding and maintenance processes (including updates and extensions), facilitate collaboration, and enhance the supplier experience. In terms of the latter, orchestration makes S2P processes risk-aware, providing real-time visibility into potential disruptions, enabling proactive risk mitigation, and supporting informed decision-making.

Novartis: Transforming Supplier Management

In this Spend Matters webinar, Piotr Pierzak from Novartis provides a detailed look into the company's journey with procurement orchestration. Novartis faced significant challenges in managing a high volume of supplier management requests. Pierzak highlighted the scale of the challenge, stating that Novartis supports “around 30,000 users with more than 90,000 requests, just in supplier management yearly." This volume created complexities and inefficiencies, hindering the company's ability to effectively engage with its supplier ecosystem.

To address these challenges, Novartis sought to simplify the way the business could search and operate with its business partners. Pierzak explained their vision: "I think what we try to do at Novartis is slightly different. We think of it as a LinkedIn for suppliers." To achieve this vision, the Novartis solution focused on:

• Improving User Experience: Built with ORO, Novartis’ “Suppler 360” solution aimed to simplify the supplier management process for business users, making it more intuitive and efficient.
• Automating Processes: The solution aimed at automating manual tasks to reduce the burden on both procurement and the business, accelerating supplier onboarding and maintenance.
• Enhancing Collaboration: The platform was used to facilitate better collaboration between procurement, business users, and suppliers, improving communication and alignment.

As a result of their award-winning approach, Novartis has seen increased efficiency, improved user satisfaction, and better data management. Automation and streamlined workflows have significantly reduced the time and effort required for supplier management. An intuitive experience for business users has increased adoption and compliance. Centralized supplier data and improved data quality have enabled better decision-making and risk management. Pierzak emphasizes the importance of addressing the needs of the business user. This user-centric approach was crucial to the success of Novartis's orchestration initiative.

Procurement orchestration is transformative in its ability to optimize supplier management. By addressing the challenges of siloed systems, external volatility, and poor user experience, orchestration empowers organizations to achieve greater efficiency, agility, and value in their procurement operations. The Novartis case study provides a compelling example of how orchestration can revolutionize supplier management, creating a more collaborative, efficient, and user-friendly ecosystem for both the business and its supplier partners.

Want to learn more? Watch the full webinar on demand and check out Novartis’s AP Honors Award profile from Ardent Partners.