Enterprise procurement is a process of acquiring goods, services or technology from suppliers and vendors through a centralised system. 

It can be used to improve operational efficiency, stimulate innovation, reduce costs and build better relationships with key suppliers. 

These comprehensive processes allow organisations to source, purchase and manage the acquisition of goods and services necessary for their continued operation.

Staying on top of everything across the value chain can be challenging, requiring multiple stages and stakeholders to determine the needs for supplier selection, contract negotiation, order placement, delivery management and payment processing. 

Effective enterprise procurement allows organisations to optimise costs, ensure quality and reliability, maintain compliance and align with wider strategic goals.

SAP: Best in class

While there are many platforms companies could use in this space, SAP Ariba is widely perceived as the leading programme to create the most desired outcome. SAP Ariba aims to transform procurement by providing a single, integrated platform that connects all procurement and supply chain activities. 

The solutions SAP can deliver to procurement insight and infrastructure are able to confidently take on any business challenge. With SAP, companies can provide a simple experience that allows employees to collaborate with suppliers all over the world – bringing speed, scale and savings to procurement and fresh innovation to the business. 

With SAP Business Network and the SAP Ariba source-to-pay cloud solutions, organisations can consolidate and control all categories of spend, end-to-end, on a single, integrated platform.

Innovations in the portfolio of SAP Ariba solutions include practical AI use cases that help drive efficiency across the procurement process.

Unlocking key benefits and commercial efficiencies of enterprise procurement

Etosha Thurman, Chief Marketing & Solutions Officer, Intelligent Spend and Business Network at SAP, speaks to the benefits of enterprise procurement, highlighting how the  procurement function has evolved into a strategic partner to the C-suite, focused on “maximising value, reducing risk and creating competitive advantage for organisations.”

She adds: “Cost management is still considered one of procurement’s main value drivers, with teams managing some or all aspects of an organisation’s costs, including indirect spend and, in some cases, direct materials as well as third-party services and contingent labour spend. It’s telling that future priorities identified by procurement organisations are focused on risk management strategies. 

“Effective procurement practices help mitigate risk and enhance supplier management as well as offering the potential for value creation within the supply chain. 

“Today’s technology-powered procurement processes can provide the visibility needed to proactively identify, evaluate and mitigate risks.

“Implementing the right tools and leveraging technology for procurement processes can provide improved efficiencies and streamlined operations, allowing organisations to become more strategic in spending and supplier relationships.”

Elsewhere, KPMG – one of the world's leading professional services firms – leverages enterprise procurement to enhance operational efficiency, cost savings and risk management. 

By centralising procurement, KPMG streamlines processes to ensure consistency across global operations. 

This allows for the standardisation of procurement policies and procedures, maintaining uniformity and compliance and leveraging buying power to negotiate better terms with suppliers – taking advantage of economies of scale.

Jos Joos, KPMG Global Procurement Functional Leader, says the key benefits of enterprise procurement include increased savings on expenditures and compliance with regulations. “Companies with robust procurement departments can source more effectively by consolidating volumes and negotiating better terms with suppliers,” he adds. 

“This reduces the burden on requesters, who can depend on these negotiated prices and terms and be guided towards existing contracts. They often have access to catalogues and self-service options, streamlining their requests and enhancing efficiency. 

“Enterprise procurement ensures that suppliers are vetted and monitored for risks, helping companies adhere to regulations such as CSDDD and EUDR, thereby avoiding fines and penalties from regulators.”

Continuous Improvement: Refining the approach to enterprise procurement

SAP Ariba offers one of the best services to streamline procurement processes. 

Through its comprehensive e-procurement solutions, which allow companies to integrate all spend categories globally and leverage intelligent technology, businesses can achieve significant cost savings, enhance compliance and gain unprecedented visibility into procurement activities. 

SAP Ariba facilitates efficient procure-to-pay processes through features like guided buying, spot buy capabilities and a procurement operations desk for streamlined approval workflows. Its global market adaptability ensures smooth procurement operations across diverse cultures and regions, while robust invoice management features enable touchless processing and error resolution. 

Despite all these cutting-edge features, there is still a desire to continue innovating, add new features and improve the procurement process.

Etosha highlights that SAP’s priority is to listen to the market, including customers, prospects, partners and industry analysts. Through this, the company understands what is top-of-mind for procurement professionals so it can meet the market’s most pressing needs. 

“We all know that procurement teams have worked diligently to keep pace with unprecedented challenges and disruptions experienced over the past several years,” she continues. “This era of constant change has uncovered several key trends that have informed our product roadmap. And our goal is to help companies leverage technology to increase agility and effectiveness.”

SAP research shows digitalisation remains a top priority, with the normalisation of AI and the emergence of generative AI as drivers but not the sole reason. 

As procurement’s remit expands, understanding all spend has become essential. This is why spend analytics was the top driver for digitalisation last year and shares the top spot this year. 

While procurement’s responsibilities have expanded, headcount has not increased, causing productivity gaps. 

Coupled with increased complexity in many supply markets, the work of procurement teams is simply taking longer. Speed and efficiency of processes are crucial in helping to close these gaps. Maturity is another factor, as the first wave of digital users is now reimagining processes to take full advantage of digital tools to drive further adoption and, ultimately, efficiency. 

All these dynamics make a powerful case for why organisations are focusing on digitalisation as their top priority.

Etosha goes on to say that environmental, social and governance (ESG) is another key priority. 

“Today’s procurement professionals want to partner with suppliers who help them meet their ESG standards across the board—whether those are supplier diversity, high sustainability ratings, low carbon footprint, upholding human rights or meeting government regulations like Germany’s LkSG,” she says. 

The use of the function to leverage cost management is one of the main value drivers for procurement professionals, as is supplier relationship management. 

Etosha explains: “Breaking down silos that may exist between a business and its suppliers provides the transparency needed to uncover potential risks in the supply chain and supplier base at an early stage.”

Jos believes the approach to enterprise procurement must be continuously reviewed and enhanced, adding to the importance of adapting to new regulations that demand increased scrutiny of the supplier base. 

“New risks may arise from various types of supply disruptions, such as unforeseen events or scarcity of raw materials,” he notes. 

“Additionally, AI and digital platforms may present new automation opportunities. It’s anticipated that AI could automate 50-70% of procurement activities in the near future. 

This prospect encourages companies to further refine their procurement strategies soon to stay competitive.”

Enhancing Risk Management: Tackling Supply Chain and Procurement Challenges

Procurement operates at the very centre of supply chains and is therefore subjected to the kinds of disruptions impacting businesses across the globe. 

From tackling geopolitical issues to meeting regulations, SAP Ariba’s Supplier Risk solution offers several benefits, including:

• Cloud-based deployment: Easily accessible and scalable
• Risk due diligence: Targeted assessments for suppliers
• Proactive monitoring: Ongoing risk alerts and compliance checks
• Collaborative remediation: Team-based risk management actions.

Etosha believes it is essential for procurement strategies to be forward-thinking and technology-driven to minimise supply chain risks.

As organisations consider supply chain risk, in particular the vulnerability of supply, the need for visibility, transparency and collaboration – both with suppliers and internal stakeholders – is crucial to continually have a pulse on business needs and capacity. 

Understanding suppliers, setting clear expectations and implementing process and digital solutions for supplier management empower organisations to effectively reduce risk and strengthen their supply chain, all while avoiding excessive inventory expansion.

“Transparency within the supply chain is key to diminishing risk,” Etosha continues. “By investing in tools that forecast demand and drive transparency, companies can better prepare for and respond to disruptions as they arise. 

“For instance, supplier management software allows companies to analyse data on potential suppliers, such as pricing, quality and delivery capabilities, to make better-informed decisions about which suppliers to work with.

“As procurement teams evolve, they are turning to technology not just to transform their interactions with suppliers, but also to redefine the metrics and methods of supplier management. 

“Supplier management tools aim to make these processes more efficient by allowing companies to work with their supplier network in real-time and develop the relationships needed for long-term success.”

Jos adds that high-quality management is becoming imperative, primarily to prevent supply disruptions caused by geopolitical tensions and unforeseen events like wars and regional conflicts and helping to avoid regulatory penalties (CSDDD, EUDR, DORA).

He says: “Enterprise procurement involves not only achieving savings but also monitoring third-party risks, maintaining compliance and ensuring uninterrupted supply.”Jos also emphasises that success is contingent upon a company's sector and operational region, as well as geographical reach.

“For a local company with local suppliers, the procurement organisation can automate many processes,” he concludes. “Success may come from further digitisation, focusing on strategic sourcing and generating savings while fostering innovation. 

“For those with a global supply chain, success for a procurement organisation hinges on risk management and the avoidance of supply disruptions. Continuous monitoring of the supply base and adherence to regulations such as CSDDD and EUDR are crucial. Success will depend on the organisation's ability to do so.”

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