Enterprises Look to Improve Procurement Efficiency Through Platform Providers

Enterprises are embracing providers of procurement platforms to help make their processes more efficient and cost effective as they contend with pandemic-related challenges and an increasingly complex operating environment, according to a new report published today by Information Services Group (ISG) (Nasdaq:III), a leading global technology research and advisory firm.

The 2021 ISG Provider Lens Procurement Platforms Global Report finds leading providers of procurement platforms and services expanding their offerings to accelerate the digital transformation customers are demanding coming out of the pandemic.

COVID-19 has interrupted supply chains and disrupted cash flow, and the advent of cloud-based digital business requires more complex procurement systems and environments, the report adds. Business activities in many markets are now requiring more goods and services from a growing number of suppliers, increasing the number of rules and contracts that need to be managed.

“These changes are triggering the need to transform procurement into something more agile, anticipatory and responsive, while also increasing the difficulty of managing procurement processes,” said Jan Erik Aase, partner and global leader, ISG Provider Lens Research. “The pandemic has made the goals of efficiency, cost reduction and risk aversion more challenging to achieve.”

The report sees procurement platform providers investing in software interoperability, especially through application programming interfaces, improved master data management and improvements in user experience. Many providers are adding professional service offerings, including the integration of procurement systems, data and functions with finance and HR services.

Even procurement platform providers that have close partnerships with leading procurement business process outsourcing and transformation services providers are themselves investing in professional services to offer more value to clients and foster deeper and broader customer relationships, the report says. Platform providers are primarily investing in change management and business process redesign.

Procurement platform providers tend to go to market with a value proposition that focuses on immediate savings for customers, the report adds. Some platform providers strongly emphasize business outcome improvements, operational efficiencies and return on investment as creating the means for customers to finance investments in their platforms.