Future of Supply Chain – Sourcing and Procurement Software

Future of Supply Chain – Sourcing and Procurement Software

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Procurement is a key insertion point for end-to-end supply chain management, as it is one of the first steps taken in the supply chain journey.

Sub-optimal procurement strategies or processes can have ripple effects throughout the entire supply chain, down to the end customer and company cash flows.

The topic of supply chain management and resilience has gained increased attention due to the dual shocks of the COVID-19 pandemic and US-China trade tensions. These shocks are on top of longer-term trends such as rising demand volatility, ESG requirements, and shortened lead times. Complex global supply chains must now re-evaluate their sourcing strategies. ngp capital believe categories that include planning, optimization, automation, discovery, and collaboration are ripe for disruption.

McKinsey & Company estimates that ~40% of procurement tasks, from spend strategy and planning to payments and analytics, can be automated with currently available technologies. Boston Consulting Group (BCG) predicts that digital solutions can reduce the end-to-end time for procurement processes by up to 80% for standardized items like office supplies and by 40% for more complex items like capital spend. The combined improvements could generate savings of 1% to 3%.

Chad Bailey and Jacob Fellman at NGP Capital believe that the field is open for best-of-breed solutions to accelerate growth in the category, empowering procurement teams with the required tools for the complexities of today. Why?

  1. Market leaders like Coupa Software and SAP Ariba do not solve all customer problems.
  2. Management consultants remain widely used for procurement projects.
  3. There is a prevalence of in-house tools.
  4. The potential of AI remains largely unleveraged.
  5. We see strong momentum for companies like Globality, Inc., Keelvar, scoutbee, and SirionLabs.”

 

For more, read the full article here.

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