Special thanks to SourceOne Management Services for this guest post.

Don’t miss updates on Procurement & Supply Chain, Subscribe here!

Since the early beginning of the 21st century, Cloud computing has brought an increasingly wide range of affordable, flexible, and secure solutions to multiple industries in the market. From small businesses to big international firms, a clear trend to outsource business applications, such as ERP or Procurement platforms, has been witnessed for the past decade. Studies show that 50% of business IT infrastructure will be “in the cloud” by 2020.

This recent trend applies specifically to procurement and sourcing applications. Traditional infrastructure involved a variety of hardware and software, requiring a team of experts to install, run, and maintain. Nowadays, cloud-based application and/or software is available as an alternative solution to some well-established procurement tools. E-sourcing platforms, like www.whyabe.com, for example, is a well-proven technology allowing buyers and suppliers to securely share information on a single platform with no limitation of data size transfer and with 24/7 access worldwide. Suppliers can use this solution to increase their visibility and create their own catalogs to promote their business, while buyers can organize and gain access to a large basket of contacts without spending unproductive hours looking for the right contact on an internet browser.

The Benefits of the Cloud

The number one benefit of cloud computing? Simplicity. Overall, the platform is highly scalable and easily integrated to legacy systems to support a variety of procurement functions including storing and reporting data and automating key processes – all helping to simplify procurement operations from strategic sourcing to supplier management. And with Cloud-based technology comes significant savings. It offers the ability to choose (and pay) for selected features, and thus, prevent you from getting stuck paying for bloatware. Moving to the cloud also means moving faster than ever before. Time is money! Traditional ERP or E-Procurement tools can take weeks to commission, implement, and configure. In contrast, cloud services allow a company to reach its desired audience in a matter of hours. The platform also improves visibility and communication with the ability to share information with cross-functional teams, a vital capability that helps break the silos between procurement and other company departments.

Coordinating the Investment

For many companies, transitioning to the cloud is a long-term strategic investment. As opposed to traditional tools which require multiple capital expenses per asset, these solutions are more streamlined and simple to manage, allowing for more predictable operating expenditures. Transitioning to such solutions will require both procurement and IT department to collaborate in order to maximize the investment added value.

Moving to a cloud-based solution should be driven by better managing and reducing expenditures as well as innovating and optimizing information and service delivery. Since the cloud-based providers will most likely be managed by IT and mostly used by Procurement, both departments’ corporate objectives needs to be taken into account in order to maximize benefits for the whole company. The cheapest cloud-based solution matching with procurement’s needs won’t be necessarily the best suited for a company if it does not fit with IT’s needs.

Moreover, IT will be best suited to address Procurement’s security concerns: adopting cloud technology may bring some challenges in terms of security or even having employees with cloud-based supply chain managing skills. But well-run cloud providers offer reliable security solutions as they must be in compliance with SOC2 and AT 101. SOC 2 audits are performed in accordance with the AT 101 professional standards and based on the 5 Trust Services Principles (TSP): Security, Availability, Processing Integrity, Confidentiality and Privacy. Cloud services providers have to use any one or all of these 5 TSPs depending on who their clients are, answering companies concerns in that matter. With Information Technology being their core business competency, they will be more likely to have a more specialized staff with better ability to act on security matters and providing comprehensive training.

A Worthwhile Endeavor

Adapting to new technology is vital for a company’s competitive advantage. As significant savings can be achieved by a well-organized supply chain department, e-procurement application appears to be an optimized solution for such goals. Managing this change won’t be easy depending on the audience, but will end up as a smart move giving you a significant advantage to competitors.

Matt Chabanon

Matt Chabanon is a Project Analyst at Source One Management Services, developing and executing sourcing events to help companies manage spend and optimize value in their supply chains. Prior to joining Source One, Matt was a Project Manager for ThyssenKrupp, specializing in inventory and maintenance planning and contract management. Click to learn more about Source One’s category and industry expertise.

More Posts - Website