What are the priorities of procurement?

Traditionally, the goal of the procurement team has been, simply, to procure—in a cost-efficient manner—what resources the business needs to operate. But procurement is changing. And increasingly, procurement teams also need to drive new business value in their own right. They can do this in the following ways: 

• Proactively and more rapidly resolving employee requests
• Increasing process adoption with user-friendly unified intake  
• Creating more efficient, differentiated, and enjoyable guided buying experiences for strategic spending
• Mitigating potential third-party risks and cutting down on costly mistakes
• Maximizing the value of vendor partnerships 

And that’s just the tip of the iceberg. But to do any of this, procurement teams have to address a much more basic problem: They have to get employees to follow their processes. 

The procurement problem

Internal process adoption in procurement is endemically low. By some estimates, a full 50-80% of invoices stem from rogue spend. The result is a radical lack of transparency into the status of requests and critical metrics like rogue or maverick spend. 

But that’s just the start. Often, requesters don’t even know what your organization’s procurement processes are, let alone how to follow them. Why? It’s because traditional procurement processes tend to be complex, fragmented, and challenging to follow. 

This is a problem for many reasons—the fact that it inhibits procurement teams from creating net new business value being just the start. Low process adoption translates directly into inefficiency, increased risk, reduced transparency, and slower time-to-value. 

To increase the capacity of the procurement department as partners to the business inside your organization, procurement teams have to start by improving the experience of working with procurement to increase procurement process adoption. Compliance and efficiency depend on high process adoption. And high adoption hinges on great internal process experiences. 

But how can procurement teams begin to do that? That’s why we created this handbook. Let’s get started:

1) Create internal process experiences that are both easy to follow and that provide real value to requesters.

The key to increasing process adoption in any internal service organization is optimizing the experience for requesters so they’ll actually want to follow your processes. To that end, your intake processes should not require change management. And they should be smart, meaning they should work for employees, and proactively resolve their problems and address their needs.

• What does “good” look like? Processes meet employees where they are, and don’t force them to learn how to use a new tool in order to initiate or engage with a procurement buying experience. Instead, they are able to do things like submit purchase orders from the systems they already work in, such as Slack, Teams, and Outlook. They can also use a single, dynamic access point with a simple UI, like an AI Front Door, which intelligently, rapidly delivers resolution to employee requests. Together, those provide a unified intake experience. At the same time, requesters enjoy visibility into the status of their request. There should be 100% satisfaction among surveyed employees with how easy and seamless it is to make procurement requests.
  

• What do you need to achieve that? A system for gathering requests from all the sources of intake across the organization, including forms, emails, chat, and other systems; means of triaging requests submitted across all methods; a system for identifying and informing the requester of potential overlap with existing tools to prevent purchasing redundant software; means of funneling all work related to fielding, synthesizing, and deciding on requests into one portal view. (A process experience platform like Tonkean’s ProcurementWorks, which wraps around every piece of technology your organization might use, and gives every stakeholder in the procurement process full visibility into the status and state of their request, provides all this.)

Dive Deeper: To increase the adoption of your procurement processes—be they related to tail-spend items or large strategic spend—you have to make those experiences valuable and easy with a unified intake experience. That means they should be personalized, flexible, transparent, and capable of accommodating different working styles across teams and departments. (A simplified, user-friendly intake process for internal requesters will also help procurement identify and prioritize areas where there is a real business need. That in turn helps them deliver excellent value at a competitive price, thereby further solidifying procurement’s credibility as a strategic function in the business.)

This is what makes a process experience platform such a valuable investment for procurement teams. It wraps around your existing tools—all your existing tools—so it’s easy for everyone to make purchases or interact with the procurement team. And because it breaks down technology silos, it also guarantees visibility. More on that later.

2) Use AI to triage and classify unstructured inbound business requests.

Another issue with low process adoption is it forces procurement teams to undertake lots of high-effort manual work in order to complete requests or otherwise effectively manage intake. Managing unstructured procurement intake processes requires logging into multiple disconnected systems, manually coordinating follow ups to resolve requests, and manually inputting lots of data. The first step to addressing this is empowering requesters to actually follow your processes—we got that. But to translate adoption into business value, you have to work smarter on the back end. That means leveraging innovative technologies, such as AI and no-code automation, to facilitate process orchestration–or in this case specifically, procurement orchestration. 

• What does “good” look like? Manual work per procurement manager reduced by 6-10 hours per week; increased cost transparency; information presented in the appropriate business context; AI that automatically triages and classifies unstructured inbound business requests; AI that automatically prioritizes inbound requests, surfaces risks, auto-handles simple requests, and escalates complex tasks when needed. For example, in Slack, an employee can kick off a software purchase in a procurement intake channel (or Tonkean’s AI Front Door) by typing “I want to make a purchase.” Tonkean automatically responds with the proper item or context, if it doesn’t resolve the request completely. On the other side, Tonkean automatically triages the data entered.
  

• What do you need to achieve that? Tools like ProcurementGPT, which is an integration with OpenAI that allows procurement teams to create processes that automatically identify appropriate purchase categories, analyze vendors’ websites, extract their benefits, suggest alternatives, and even auto-generate RFx; the AI Front Door, which is an intelligent and proactive AI-powered entry point for requesters; and Tonkean Forms, which deliver dynamic and personalized intake channels that drive greater adoption and are also effortlessly modifiable. 
  

Dive Deeper: The procurement team is overburdened with incoming requests from the organization. Finding a controlled way to leverage AI within everyday procurement processes allows procurement teams to fully automate tail-spend processing, strategic sourcing, and “3 Bids and a Buy.” This helps you shorten the procurement cycle time and reduce time to respond and time to completion. More broadly, using technology in this way proves integral to creating powerful, personalized process experiences that incentivize and facilitate process adoption, as well as increase efficiency, lower risk, and reduce cost. 

Finally, let’s discuss procurement orchestration. Procurement is a field that’s in the midst of a new level of digital transformation. 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. 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.

In other words, procurement teams must take seriously this task of using their existing tools better together. One way to do that is by investing in means of procurement orchestration. 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 tools their employees already use. Ultimately, it functions as a way to leverage innovative technologies inside procurement as strategically as possible, in accordance with your specific context.

We talk a lot about digital transformation inside organizations. Inside the procurement department, this is what it looks like.

3) Take control over procurement process iteration with no-code 

Innovative technology like AI does procurement teams little good if procurement teams are unable to manage, implement, or iterate with the technology on their own—which is where many technology initiatives historically die. Having to rely on developers to set up or make changes to the tools you invest in eliminates the point of investing in that technology. But you can work around this by ensuring what platforms you invest in come with no-code interfaces.

• What does “good” look like? Procurement teams are empowered to customize and automate their processes by themselves—no code, change management, or developers required. Procurement teams also create the structures, policies, and prioritization hierarchies they need for the business logic underlying their buying experiences. 
• What do you need to achieve that? No-code interfaces; whatever process experience or automation platform procurement teams use needs to come with a no-code interface. 

No-code interfaces allow procurement teams to own the creation and delivery of their automations end to end. This allows you to accelerate implementation, more rapidly iterate, and generally operate in a manner both more agile and adaptive. A great example are Tonkean Forms, which provide not only a personalized AI-powered intake experience for requesters, but an easy-to-use WYSIWYG-like design format that anyone can use to create them.

4) Make better use of procurement data by centralizing it

One problem of low process adoption is it results in low visibility. When employees submit rogue invoices, or when intake is managed in an unstructured way, or when key data is spread out across a variety of apps and systems, it makes it impossible to track the status of requests. That’s true either for employees wondering about the status of their request or for procurement teams who in turn have to collaborate with other departments to bring more complex requests to resolution. 

Further, procurement teams aren’t able to easily survey the high-level metrics they need to better understand what kinds of requests they’re getting or where along the buying experience employees are getting stuck, because that data isn’t centralized or accessible, either. 

You can solve this by funneling all your procurement data—from request types to request status to submitted pieces of documentation—into one centralized procurement portal. No matter where it’s submitted from. That’s something a platform like Tonkean can do, because it wraps around and connects with the various places that data often is left to collect dust.

A key benefit is that it puts you in control of how your data is used—such as by fueling the unified intake experience for requesters. When all your apps are available through Tonkean, as well as your organization’s data, documents, forms, knowledge base, etc., they more accurately support the power of the AI Front Door and the convenience of letting people interact from the apps they already use. ‍

• What does “good” look like? Procurement teams enjoy access to a single-source-of-truth data portal where information pertaining to inbound and processed requests, vendors, sourcing metrics, important materials (such as contracts), request types, categories, and statuses are all available. That portal allows procurement teams to drill down into specific metrics, track requests one-by-one, and glean high-level learnings regarding performance. It should also come with customizable sections like Accounts Payable, Sourcing & Purchasing, and Swag Purchasing. 
• What do you need to achieve that? Systems that integrate with whatever applications internal departments prefer spending time in and that automate the process of collecting financial data across apps; means of integrating license reporting into a single tool; process for conducting analysis against KPIs. Or a process experience platform with these capabilities set up on the back end. 

In Tonkean, we funnel and then surface all data relevant to any procurement buying experience in an easy-to-access procurement portal, where employees can find request statuses, and procurement teams can see more high-level information, including how many requests have come in, what kinds of requests they are, and any and all related documentation. 

This means  procurement teams will always be able to use their procurement portal to see, edit, and track everything related to every inbound request, including remaining steps in the workflow, related documentation, and supplier information pulled from other systems.

Ready to get started? Learn more.

Glossary

• Spend management – The process of collecting, cleansing, classifying and analyzing expenditure data
• Tail-spend - The money spent on purchases that account for roughly 80% of total transactions, which makes up about 20% of the company's spend by volume.
• Strategic Spending - Goods and services that are critical to the mission of the organization.
• P2P - Procure-to-pay process
• GPT - Generative pre-trained transformer
• RFx - Encompasses the entire formal request process