Procurement Technology is Having a Big Year, Here’s Why

By Mike Armstrong

The world of procurement is evolving. Even before the COVID-19 pandemic, public and private sector procurement professionals were expressing the need for accelerated digital transformation to meet the demands of the modern world. In today’s market, those conditions are even more prevalent.

We live in a world where business velocity continues to accelerate, procurement teams are often smaller than in decades past, and disruption continues to impact business on a global scale. Finding ways to save time and increase efficiency is paramount to success, and when the going gets tough, the tough get digital.

Procurement technology has been a growing sector for some time. Some experts predict the Procurement software market to reach USD 9.6 million by 2026, nearly double its current value. Considering the rise of technology solutions in procurement, the appetite for efficiency among procurement professionals, and the unpredictability of today’s market, 2022 figures to be a big year for procurement technology.

What is Procurement Technology?

Due to the wide scope of procurement, the definition of procurement tech covers a broad range of categories. The simplest answer is that procurement technology includes systems that interact with sourcing, payment, analytics, collaboration, and supplier relations.

Some of the major categories of procurement technology are Source-to-Pay, Source-to-Contract and Procure-to-Pay. Regardless of the functionality of these specific types, they all involve taking formerly disparate processes, centralizing them in a platform, and digitizing them. When properly implemented, this results in the removal of silos, increased communication among parties, gains in efficiency, and improved analytics capabilities.

A Perfect Storm of Disruption and Innovation

Growth in the tech sector is nearly always the result of disruption. There’s no denying the significant disruption the COVID-19 pandemic caused across all business sectors, especially the global supply chain, where Accenture reports 94% of the Fortune 1000 are reporting issues. The good news is that there appears to be an end in sight, with lingering effects throughout 2022 and perhaps beyond. A post- pandemic return to normalcy has been on the horizon, although political tensions between the West and Russia and military action in Ukraine are creating their own challenges.

Companies and public bodies must move quickly and adjust their strategies accordingly. But what does that strategy look like? If the last couple of years have taught us anything, it’s that old, manual processes like emailing, calling, and housing data in spreadsheets are error-prone and inefficient. The world is adapting to a new way of doing business and everyone must adjust or risk falling behind.

For procurement, that means digitization.

Digital Transformation in the Age of SaaS and Disruptive Tech

Think about the ways digitization has revolutionized other industries. Some of the obvious examples include what Uber and Lyft have done for transportation, Kayak and Airbnb have done for hospitality, and Salesforce has done for customer relationship management. The amount of data, number of moving parts, and the necessity for communication present in procurement make it a perfect candidate for a similar form of transformation.

The key areas procurement technology is focusing on to adjust to this new climate are transparency, efficiency, procurement planning, streamlined communications, supplier management, security, compliance, and reporting. Housing the execution of these functions and the data associated with them in one platform gives procurement professionals a massive boost in efficiency. It’s perfect for maintaining—even accelerating—procurement functions in times of disruption. It also provides a much-needed boost to smaller procurement teams, such as those common in today’s world of public purchasing.

Public Sector Procurement and Cooperative Contracts

Business outcomes in the public and private sectors are linked in many ways, but public purchasing has its own unique challenges. For example, understaffed procurement teams and stringent federal, state, and local regulations are driving a rise in cooperative purchasing among public agency buyers. Cooperative contracts have many of the necessary compliance details baked in, making them more attractive for public agencies.

In addition to the existing factors making cooperative contracts ideal for public procurement, the Biden administration's massive infrastructure bill will contribute to public spending for years to come. When combined with the emergency funds allocated to public schools and local governments throughout the course of the pandemic, public agencies have more funding than usual. Like all things state and federal, however, securing these funds comes with strictly defined compliance. Cooperative contracts and procurement technologies like CompareCoOps help public agencies ensure they’re selecting contracts that fit those state and federal guidelines.

Procurement has seen its share of unique market conditions over the last several years. With increasing demands on procurement professionals, the world reopening, public funds becoming more available, and new innovations in technology, the remainder of 2022 and 2023 figure to be great for procurement tech. If you’re not already doing it, you need to add it to your procurement strategy as soon as possible.

Sign Up Today and Start Leveraging Procurement Technology

CompareCoOps’ platform was built to address inefficiencies in the public procurement landscape. It gives public agency buyers immediate and free access to a broad range of suppliers, contracts, cooperatives, and categories. CompareCoOps allows public agencies to save time and skip the bidding process. Schedule a demo or SIGN UP TODAY.