Procurement is a field that’s in the midst of a new level of digital transformation, but challenges remain. It’s not for a lack of technology. There are lots of tools and resources available and in use, including those that tackle specific aspects of the procurement process like contract analysis, self-service contracting, spend classification, and more. There are also providers who promise that their platform is all you need. And of course, generative AI has begun showing up all over the place.
Yet too many procurement processes remain obtuse, difficult, and overly complicated. For example, it’s not uncommon for a purchase order process to include dozens of steps—spread out across siloed stakeholders.
It’s obvious that too many problems remain unsolved. Even with the rise of generative AI-powered tools, which promise unprecedented capabilities, organizations still have to figure out how to implement new technology into their existing tech stacks and how to leverage them to improve their procurement processes—and this remains a challenge.
What’s the way forward? One answer lies at the center of Dr. Elouise Epstein’s spider map (see above) of the modern procurement platform stack: procurement orchestration.
“We are witnessing a critically important innovation happening right now…the Intake/UX/Process Orchestration layer at the top,” wrote Dr. Epstein, Partner at Kearney, in a LinkedIn post. “This has the potential to be the [proverbial] 1 app to rule them all or at least the single smart interface to all the capabilities on the chart.”
That orchestration layer is the first place anyone involved in Procurement goes, from buyers to suppliers to third parties. Procurement orchestration is essentially a vertical-specific version of process orchestration. Process orchestration helps operations teams better execute, monitor, and manage entire business processes across teams and existing systems, helping organizations more strategically use the apps their employees already use.
Intake, UX, and process orchestration may at first seem like incongruous parts of the Procurement whole, but they’re all connected at the orchestration layer and make up the process experience.
Process experience is all about understanding how people actually behave. It’s about viewing tasks, workflows, and processes through a human lens.
People are always looking for the path of least resistance. If your processes aren’t well documented, or if they’re too ungainly or complex, or if nobody knows where to find them, then they won’t use them. They’ll find ways around and outside of those processes. That’s a nightmare in Procurement, where some estimates indicate 50-80% of invoices stem from rogue spend, and 20% of total procurement spending is messy and unmanaged tail spend.
More technically speaking, process experience is a UX concern. Think of the difference between a clunky, opaque procurement process in an enterprise versus the consumer experience ordering from Amazon. In the latter, you can find what you’re looking for, easily compare features and prices, and place an order within minutes and with minimal steps. (And it’s just a few clicks if you’re simply reordering something you’ve run out of.)
And it’s intuitive, whereas Procurement processes often require change management and even user training.
Procurement intake is where poor UX creates friction in the process, grinds it to a halt, or sends frustrated requesters off to find a less aggravating workaround. The intake process needs better UX, lest user adoption of your processes plummets. Procurement orchestration is the way to create it.
It’s not realistic to expect organizations to radically alter their tech stack. There are myriad reasons why, including legacy systems that are prohibitively difficult to replace, binding long-term software contracts, industry-specific tools and platforms that organizations have to use, and more.
That’s what makes procurement orchestration so powerful. It’s not just another piece of technology thrown on top of the pile; it pulls together all the other tools you already have and makes the experience of using them easier, more efficient, and more effective.
Like every new technology, generative AI like ChatGPT is in the throes of the hype cycle in which it’s often mischaracterized and misunderstood—and like every new technology, the key is understanding that it's just a tool. Then you need to learn what it does, how it works, and how you can apply it strategically to effect change.
With generative AI, it’s important to grasp what its limitations are and what it can eliminate in terms of human labor. For example, you could use ChatGPT to create an RFP. But you still need a human to double check it for accuracy. And there’s a supplier on the other end who receives and reviews that RFP. So, generative AI can speed up the process and reduce the number of hours humans have to spend performing the tedious work of creating RFPs, but it’s not magically automating the entire process.
Put another way, as Tonkean co-founder and CEO Sagi Eliyahu noted recently on the Modern Business Operations podcast, generative AI commoditizes certain aspects of work, which allows us to pay more attention to other aspects of a process when it requires a human touch. For example, the meeting that comes at the end of the RFP, where parties get to know each other and build a business relationship, is exactly the kind of thing generative AI simply cannot do.
The AI Front Door in Tonkean’s ProcurementWorks suite is another, more specific, example of how to use generative AI to push digital transformation. It’s an AI-powered intake experience for submitting and proactively resolving internal requests. The tool has a simple interface that looks like a search bar or a chat window nestled on a homepage. When employees want something—a document, a purchase request, client update, and so on—they can use regular language to ask for it, and the system will produce what they need from your organization’s own data and resources.
It doesn’t matter what other software and tools are in your tech stack, because the AI Front Door is part of Tonkean’s process orchestration. It pulls what you need from whatever apps you already use.
When people kick off a procurement process, it has to be intuitive, and easier to follow than not. It requires intelligence, and it must be dynamic, flexible, and streamlined for requesters and suppliers alike. And it must be simple—complexity is okay for IT, but not for end users.
That’s why procurement orchestration has such an impact on improving process adoption and making the entire procurement process less complex and more successful.
Start your procurement orchestration journey now with Tonkean’s ProcurementWorks. And check out this in-depth primer about how to use ProcurementWorks to power up your procurement processes.
