The Importance of Augmented Reality on Material Procurement

As innovation keeps on advancing, client encounters are moving ceaselessly from exactly what individuals see to submerging them in the brand experience itself.  One such innovation that is genuinely shaking up the technology scene is the augmented reality (AR) and without any further doubt, AR is obscuring the lines of the real world.

Unlike virtual reality (VR), augmented reality is an overlay of advanced digital content in this present reality condition. Consumers are tending more towards technology and make their purchase decisions on the go.

The impact of augmented reality on material procurement is as follows: 

Improved Customer Experience: AR and VR technology are enhancing and improving the customer/buyer experience. This utilization of augmented reality is a significant leap forward that is focused on the business and commercial industry.

Improved Communication within Departments: With augmented reality, the communication among Procurement, Operations, and Finance to examine the worth and cost drivers of the business could be improved. 

Replace Physical Human Interactions: The augmented reality replaces the need for basic human interactions whether it is a client visit or any business meeting. This helps in saving time of the organization as well as their cost.

Enhance the Procure-to-Pay process: A purchase decision can be made quickly dependent on the survey of the product or finding out about the firm’s services as clients/ buyers can encounter a similar demo. This empowers buyers to check the process worth by means of a digital product catalog.

Digitalizing Supplier Relationship Management: Negotiating with the vendors, bidding in an auction now could be made much more easier after digitalizing.

To make the procurement process proficient and stand ahead of the competitors, these new innovations can possibly reform the manner in which organizations lead certain everyday functions.

Challenges of Traditional Procurement Process

Procurement is tied up with acquiring products and enterprises and the various procurement procedures and tasks connected to this. Despite the many issues and challenges that are mainly associated with traditional procurement, numerous organizations go with the process.

A typical traditional procurement process is carried out with manual work that includes small as well as the repetitive work. These tasks can be anything from getting approvals, discussing bids, making negotiations, etc. Due to all this, it is a very challenging process.

In addition to this, the traditional procurement process is also time-consuming as well as expensive. This is because there are fewer people to manage the given processes. Dealing with the approvals, bills, and other invoices on paper are both inefficient and expensive and obviously inclined to mistakes and loss of administrative work.

Naturally, procurement is a troublesome procedure to control. Therefore, this makes visibility progressively obscured, prompting a greater loss of control and is normally expanded by miscommunication between purchaser organizations and the numerous providers included. 

The key element to beat these difficulties is automating an eProcurement stage. Connecting purchasers and dealers into one single stage. In addition, giving a system to clients to make purchases.  An eProcurement stage improves visibility that it unites all clients, procurement experts, and providers into one stage. 

Having a streamlined procurement process, sourcing and invoicing in a cloud-based stage prompts to controlled visibility over every transaction either locally or globally.

The 5 Important Steps to Effective Procurement

Thinking about the present competition available, it's essential that organizations embrace new ways of thinking, techniques, and procedures while procuring materials and that will make them "best". Here are the 5 most important steps towards an effective procurement in an organization:

Visibility: The first step to effective procurement is to get good spend visibility on what materials the organization is buying and how much is spend across all your purchases. Progress can’t be tapped without spend visibility. 

Control: Users should get to see and control what they see and buy. The way to do this is to set up controls on local buyings with automated technology to ensure the utilization of negotiated rates and invoice bills is efficiently processed. 

Efficiencies: Here the aim is to make the procurement process more efficient by speeding the procuring activity across all aspects of the process. This step ensures the streamlining of the automated procurement process and the supply chain to eliminate errors and waste if any.

Savings: The aim of step 4 is to generate savings for a procurement group.  The traditional supply chain management model relies on manual processing of negotiating with a supplier to provide the lowest pricing. This brings in to implement a good supplier relationship management platform for a smooth flow of supplier management.

Create Value: The last step is about creating value.  For procurement to add value the focus must be on improving financial conditions, improvement of quality, and improving efficiency by utilizing the resources properly and effectively.

The expense of acquiring, and working together, is on a consistent ascent. Organizations have begun to see procurement management as their top need since it takes up an enormous share of their general spend. 

The 8 Technologies that Impact Modern Procurement

Technology and innovation can be utilized in various ways through high spend transparency, well category management, effective as well as efficient supplier management, and propelled utilizing of information and data analytics. 

The technologies that impact modern procurement are as follows:

Chatbots: Chatbots and conversational bots. It is a mix of natural language processing and artificial intelligence. Chatbots help in having automated interactions between the suppliers and the customers (internal as well as external). 

Machine learning and Cognitive Analytics: Cognitive computing and machine learning help in predicting outcomes. These analytics highlights any specific issues or opportunities if any. Machine learning also provides improved intelligence for procurement professionals. 

Procurement process automation: The automation is applicable for all the parts/areas of procurement.  

Virtual Reality (VR): Virtual reality is how an individual can carry out his daily functions, interactions, and functions without leaving his place. It describes how people buy, how the user interface is performing, etc. VR helps to improve the buyer experience by creating meaningful procurement experience.

Data Mining: Here a large procurement data set is accessed and analyzed to determine the patterns, trends, and various associations. 

Cloud and Software as a Service: This technology provides access from anywhere to all areas of procurement and on-demand computational resources.

Digital Signatures: Digital signature helps to keep secure the goods and services invoice, order authorization, invoices and payments, etc. 

Authentication: This technology helps to authenticate the process of payments, supply chain, authorization, and any system access

The present upgraded and computerized business arrangements expect organizations to stay adaptable and open to new innovation that can streamline the manner in which advantages are conveyed to both internal and external partners. 

The 6 Agile Principles Relevant to Procurement

At a certain point of time, procurement as a profession will need to become agile. To resist to adapt new change in procurement is a sure way of slipping into irrelevance and disruption in business activity. So it is, therefore, useful to understand the relevant principles and consider how it can identify with your own particular means of business.

The following are the agile principles that are probably very relevant to procurement:

>> Continuous Delivery of value: The initial step of the typical procurement cycle involves speaking with a business partner to comprehend their needs and plan the sourcing of materials accordingly. When this has been done, normal updates to tell the stakeholder how the procedure is going, regardless of whether there will be any delays and watch that their prerequisites haven't changed should be followed.

>> Adapt Changes: For procurement, this implies figuring out how to work in adaptability at each phase of the sourcing cycle.  Adaptable agreements may give you space to oblige your stakeholder’s very last-minute changes. 

>> Fast Delivery: Speed is one of the benefits of agile principles. Compared to other businesses if the procurement process takes unnecessary time for delivery, then it is a matter of concern. 

>> Communication: For an efficient procurement process, the method of communication is a must. By keeping the communication face to face, the errors and miscommunication of ideas are minimized that frequently occur in mails.

>> Simplifying the procurement process: Complex procurement processes can harm relationships with vendors, stakeholders, as well as, end-users. By following agile principles for procurement will show a clear map of how to simplify and fasten the procurement cycle.

>> Agile Principles advance sustainability: In procurement, this includes creating lean production to minimize the wastage during the process, having a just-in-time supply chain flow, etc. Following any work procedure (counting Agile) is a key method to limit wastage of time, ability, and assets. 

E-Procurement Opportunities in India

Electronic Procurement (also known as e-Procurement) is the way of using the internet to make it easier, faster, and less expensive B2B (business-to-business) purchase and sale of supplies and service over the Internet. 

E-procurement is something beyond a system for making purchases on the web. An appropriately executed framework can interface organizations and their business forms legitimately with suppliers while having interaction between them. This incorporates management correspondence, bids, questions and replies, past prices, and various emails sent to numerous participants. 

An efficient e-procurement system enables an organization to its interactions with its most crucial suppliers. E-Procurement provides built-in monitoring tools that help to control costs and guarantee the most extreme vendor performance. The e-procurement system allows managers to confirm pricing, and leverage previous agreements to assure each new price quoted is more competitive than the last price.

With all the advantages that are accomplished from E-procurement, the organization can fundamentally expand ROE (return on equity) and ROI (return on investment).

Other impacts of e-procurement are increased efficiency due to market competition, procurement monitoring, fewer errors due to automated procedures, etc.

E-procurement, for purchasing immediate products and services, is a successful procurement framework, causing a ripple effect in purchasing circles. The specialist organization assumes a pivotal job in offering to source and procuring that fulfill client needs and give an abundant worth expansion to the services that are provided. 

Before, traditional techniques for procurement offered little transparency and lesser fulfillment of negotiation with providers. E-procurement offers the advantages of more transparency, more extensive geographical reach and lesser time of negotiation, easy purchasing, and better supplier evaluating. 

Additionally supported reserve funds can be accomplished through mechanized, simple to-utilize purchasing, managing invoices, and supplier enablement abilities. Realizing item numbers, offer costs and contact focuses can assist organizations with finalizing negotiations while different providers are battling to accumulate their important information.

6 Procurement Metrics that will Drive Improvement

Procurement is the same, and most current procurement procedures have a suite of indicators for giving feedback on the performance. Effective and efficient procurement relies upon efficiently examining spend information. The three major classifications of KPIs (key performance indicators) for procurement are quality, conveyance and cost reserve funds.

The 6 procurement metrics that will drive improvement in a business are as follows:

>> Spend Management: This is normally communicated as a percentage of effective and actively managed spending. The more the organization’s spending, the more is the influence on procurement and also on savings.

>> Time of Procurement Cycle: This is a pointer of procurement’s productivity, both inside the team and with the suppliers. Key Performance Indicator’s (KPI) look at the average time of the procurement process from a sourcing demand being submitted to a buy request being set or agreement being agreed upon.

>> Quality: This metric takes a look at the quality and nature of products that are to be procured by tracking metrics like defect rates, dismissals of products, and supply disturbances because of low quality. Accuracy is another important metric both by the procurement team and suppliers. 

>> Delivery: This indicator measures whether the procurement done is right and the procured materials are the items that an organization needs and when they are in need.  Also, the organization can follow how frequently the deliveries are early or late and by how many days they are pending.

>> Agreement Compliance: This metric sees how well the suppliers are meeting contract terms and conditions. It is often expressed as the ratio of contracts that are not meeting the specifications with the complete number of contracts. 

>> ROI from Procurement: ROI metric is a significant level of measurement that helps in estimating the procurement performance by comparing cost reserve funds to the procurement’s team budget.

Challenges Faced by a Business during e-procurement

>> One of the fundamental difficulties for e-Procurement is the foundation of the appropriate and custom strategy. Each undertaking or activity should be established in a cautious, systematic and dynamic procedure. This seems to be an exceptionally troublesome task, requiring an emphasis on numerous viewpoints and procedures, an all-encompassing vision, long haul centre, and targets.

>> The government must also have a proper methodology to beat the boundaries to change. Some portion of the methodology is to participate in a thorough evaluation of the present circumstance, the truth on the ground and the stock of ventures, articulate costs, effects and advantages of a program just as ceaselessly screen and assess the undertaking redesigning. 

>> Getting an exercise from the private sector, e-Procurement must be client-driven and administration situated. This implies a dream of e-Procurement suggests giving more noteworthy access to data just as better, increasingly equivalent administrations and techniques for open and organizations.

>> In a common PSU (Public Sector Undertakings) and Government, the procurement runs into many crores and complexity is innate in e-procurement procedure. What is to be procured is entirely subject to the idea of its business, and in this manner fluctuates as per the businesses.

>> In the present situation, receiving a powerful cost sparing component is vital to any organization's proceeded with presence.  Another significant perspective that the Government and PSU's have to investigate is driving authoritative compliance with negotiated agreements. This would empower Governments to keep and continue their reserve funds.

Top 6 Essential Features for B2B Marketplaces

Being different from the single seller B2B websites, a multi-vendor B2B marketplace highlights one of a kind capacities that empower clients to analyze, communicate, and pick items from the best B2B merchants everywhere throughout the world. 

This idealistic cycle of the developing scale made the B2B marketplace a worthwhile plan of action and gave eCommerce organizations various open doors in each industry. Vendors also get advantage by joining the b2b marketplace as it helps to expand their potential customer base and increase brand exposure.

Unlike B2C marketplaces, the B2B e-commerce portal is a bit complex due to multi-vendor users, making orders in bulk, bidding workflows, etc. 

The top 6 features that are essential for b2b marketplaces are as follows:

>> Multi-vendor portal capabilities: Each vendor utilizing the b2b marketplace shall be permitted to effectively deal with their own organization data, contact details, material pages, material inventory, and also the pricing.

>> Security, Transparency, and Confidentiality: There should be multi-vendor user management available in the b2b platform to easily manage and control their company details and other sensitive details.

>> Responsive to edit PO: B2B buyers will always expect to have a flexible portal where they can edit or revise the purchase order. It can include changing the payment method, shipping address, method of delivery, etc.

>> Filtering and Navigation: Enabling advanced filtering and search will allow b2b buyers to quickly find the required products and also have a smooth buying experience.

>> Manage Pricing: B2B vendors require full command over their eCommerce portal set up just like they would do on their own portal. This includes customizing and managing pricing for their buyers, constant evaluation with their backend systems, etc. 

>> Order Negotiations: B2B sellers-buyers often involve multiple cycles of order negotiations before purchasing the product. So, there must be practices concerning a consistent change from RFQ to formal quote to arrange in B2B eCommerce.