The Evolution and Future of E-Procurement Software

Online marketplaces like Ariba (founded in 1996) and Commerce One (founded in 1994) pioneered the process of purchasing goods and services using the internet and other digital technologies. These companies transformed traditional procurement methods – which often relied on paper-based processes, manual approval systems, and physical transactions – expanding into business-to-business (B2B) e-commerce platforms.

Digitising various stages of the procurement process, including requisitioning, sourcing, ordering, invoicing, and payment, e-procurement systems streamline purchasing activities, reduce paperwork, and facilitate transparency and efficiency in procurement processes.

But another transformation is well underway, with the continued rise of automation and AI, supply chains are continuing to see rapid evolution, but what does it mean for the future of e-procurement?

How rapid has the evolution of software been?

Mark Reddy, Global Director, Finance, Spend & Governance, at OneAdvanced has seen this development first hand, with over 15 years of experience in strategic growth.

He says: “There has been a continuous evolution of e-procurement software over the past couple of decades, with processes being automated and AI and machine learning driving accelerated change recently.

“While some organisations have embraced the latest digital methods and experienced significant savings in employee time and energy output, others have been slow to unburden themselves from manual processes. This means there may still be many procurement professionals who are unaware of the advanced solutions available to them.”

Simon Whatson, Vice President at Efficio, who has nearly 10 years of procurement experience and is a senior leader responsible for selling and managing international teams of consultants and client resources agrees with Reddy, adding: “The evolution of technology is moving at a break-neck pace, but the adoption by businesses, and procurement in particular, has been slow and still significantly lags behind the pace of adoption in our personal lives.

“We still see lots of procurement teams carrying out processes manually, despite the technology we have available. As consumers, we have easy, convenient ways of buying products in our private lives, like food, clothes and even holidays via apps or websites. However, when you step into the business environment, the experience of being a buyer is very different. In general, we have not enabled our procurement processes with technology.”

Exciting and impactful developments?

It seems AI’s impact on procurement is inescapable, with most of the figures mentioning it as the most exciting and impactful development.

Jack Macfarlane, Founder and CEO of leading e-procurement software provider, DeepStream, explained why: “Undoubtedly the integration of AI has had the most significance and generated the most excitement. AI has enabled predictive analytics that has empowered companies to accurately forecast demand, optimise inventory, and automate mundane procurement tasks to free up valuable time for more strategic decision-making. This transformative technology has ushered in a new era of intelligence and strategy."

Seth Catalli, Chief Revenue Officer at Globality, agrees with Macfarlane’s call on AI, as he adds: AI’s level of interaction that feels human-level is closer than ever. As a result, AI-based procurement systems can understand and respond to human intent, delivering a more engaging and user-friendly experience. 

In the context of procurement and sourcing, for example, AI is already doing valuable work writing project descriptions, proposals, recommendations, selections, negotiations, and much more. Bottom line, AI personalities and optimises the procurement experience for organisations by recommending suppliers based on their specific needs and preferences. 

What trends come next?

Despite such a dramatic shift in the landscape over the last 30 years, it shows no signs of slowing down, but what new trends are going to emerge next?

Joe Gibson, Head of Digital Innovation at commercial, supply chain and operations consultancy 4C Associates, has over 14-years' experience in various leadership roles including transformation, procurement, and supply chain, he predicts that: “Everything will be real-time in the e-procurement world - catalogue pricing updates, risk monitoring for contractual compliance, all without human intervention. Greater negotiation pressure in tail-spend as bots enable frictionless 24/7, 365-day negotiations.

“Procurement orchestration tooling emerges, unifying the myriad disconnected applications organisations utilise daily to drive efficiency. Open APIs allow integration of diverse data sources to underpin decision-making processes. The hyper-connected future promises seamless, data-driven procurement through real-time orchestration of data, people, processes, and technology.”

As CEO of Simfoni’s Strategic Spend Terminal, Ron Emma has ultimate oversight across the spend analytics and e-sourcing-related solutions and their teams, he says that: “The next steps in eProcurement involve further leveraging AI and machine learning for predictive analytics, increased automation, and the introduction of bots that do tasks on behalf of the user. Sustainability and ethical sourcing are becoming increasingly important, driving the demand for solutions that can automatically adjust to include both price or non-price factors in award decisions seamlessly. At Simfoni, we're focused on advancing our platforms to address these emerging trends, ensuring that our solutions help clients not only save money but also adhere to their values and compliance requirements.”

Where will we be over the next decade?

It's unknown where e-procurement will go over the next five to 10 years, but Macfarlane believes that: “AI systems and e-procurement platforms could become more capable of autonomously managing complex procurement processes as cloud-based platforms become even more intelligent and provide more detailed insights. Blockchain integration will increase transparency and trust, and predictive analytics will enhance proactive decision-making to better support teams and greater market knowledge and access.”

While Reddy believes that: “AI and automation is inevitably going to disrupt the procurement function, with its immense potential to enhance and improve sourcing, contract/supplier management, and purchasing processes. 

The most transformative solutions will completely remove the manual processes inherent in tasks like issuing and recording invoices. 

These are the processes that previously defined a large part of the procurement role, but in future the job will be very different. Procurement teams actually play a vital role in helping to achieve overall organisational objectives. 

AI has the power to elevate this position even further when used in the right way, with the right data, to underpin and evaluate core areas of a business such as risk, cost savings and strategic planning. With a renewed reputation as an exciting, vital, and influential ally for commercial success, procurement will attract even more of the best talent, representing an increasingly dynamic and desirable career option.”

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