How Procurement Control Towers Empower Multi-Enterprise Collaboration
Coordinating with multiple companies end-to-end during a constantly evolving procurement cycle can be a minefield. And add a disrupted global supply chain, shaking currency valuations, and ongoing political unrest. As a result, this complicated system is even more fragile than ever.Download Now
How Procurement Control Towers Empower Multi-Enterprise Collaboration
Coordinating with multiple companies end-to-end during a constantly evolving procurement cycle can be a minefield. And add a disrupted global supply chain, shaking currency valuations, and ongoing political unrest. As a result, this complicated system is even more fragile than ever.Download NowWatch Now
A global economy allows for exponential growth, spreading job opportunities and tapping into new revenue. And with this expansive economic opportunity comes an ever-increasing procurement process.
Coordinating with multiple companies end-to-end during a constantly evolving procurement cycle can be a minefield. And add a disrupted global supply chain, shaking currency valuations, and ongoing political unrest. As a result, this complicated system is even more fragile than ever.
The good news is that companies can significantly reduce the impact of global supply chain disruption and procurement management by adding control tower software to their existing legacy software stack. But how?
By facilitating a live, synergistic, two-way communication system between you and all enterprises involved in your procurement cycle.
Common Pitfalls of Procurement Operations
Proper supplies are critical to every business model– having orders fulfilled predictably and on time is essential to providing top customer service in an increasingly substitutable economy. But unfortunately, smooth procurement involves high dependency on many other companies, the larger economy, and even natural disasters.
And yet, day-to-day management in a calm economy presents plenty of obstacles.
- Inconsistent communication: The larger your network of procurement sources, the more challenging it is to create standardized communication schedules– you're at the mercy of their communication processes around delayed or canceled procurements. Multiplied across a hundred or more suppliers, you have a high-risk environment.
- Lack of standardized data reporting: Suppliers each have their own native reporting system, categorizing and reporting different data points in unique formats. This can create a complex forest in which individual trees are easily lost.
- Hidden costs: A natural corollary to unstandardized data reporting is an inability to manage expenses meaningfully. Multi-enterprise procurement is a top place to leak cash through overpayments, inefficiencies, and mismanaged systems.
- Inability to predict delays or changes: Finally, this confusion and lack of a centralized, clear picture leave your company unable to meet changes with agility. Even one supplier delay or change can cause a wide-reaching ripple. It's critical to anticipate and respond quickly to any procurement changes to minimize ripple effects and clearly communicate internally and to clients.
What is a Procurement Control Tower?
If you work with procurement, you've likely experienced the frustration and financial toll of the obstacles from the previous section. And meaningfully addressing such complex and far-reaching systems isn't only daunting, it's improbable.
Luckily, adding a procurement control tower to your legacy stack allows you to maintain your current systems while addressing the heavy-weight procurement problems. So what is it?
A procurement control tower is like the nerve center of your procurement network. Your partners' existing procurement systems will feed into the control tower, adjusting and streamlining the information into a synergistic, uniform view.
You'll remove the risk of human input error, significantly reduce time requirements, and enable meaningful financial analysis to grow operations and decrease costs.
How Does a Procurement Control Tower Work?
Procurement control tower software creates a uniform, real-time view with accessibility for all stakeholders– but how? Each software solution will have unique offerings depending on the software provider, but here are the essentials that will apply to most options.
- Cloud-based: a cloud-based solution means you'll get live information from anywhere worldwide while keeping your data secure. You'll also get the option to integrate into your existing tech stack so you can keep the rest of your system.
- Automation: Companies without procurement control towers must rely on human time and accuracy to manually input multi-enterprise data into a single spreadsheet. This simply takes too much time and leaves your company vulnerable to entry errors and improper formulas. Software streamlines the entire process by automatically feeding data into a preprogrammed database, giving you accurate information faster than your team could provide.
- Visuals: Procurement cycles involve far more teams and departments than the finance department– but long spreadsheets make it difficult for non-fiance personnel to engage with the information. Control tower software can generate visuals so all stakeholders can understand and make an informed decision quickly.
- Single source of truth: With hundreds of employees interacting across multiple organizations, the likelihood of creating an accurate picture is unlikely. But leveraging control tower software creates high-powered data input, processing, and analytics while increasing the reach of that information. Suddenly it's effortless to generate a single source of truth.
Why Use a Procurement Control Tower?
You've probably already imagined the benefits of a procurement control tower for your organization. Still, we'll cover a few more to help you maximize the software use.
- Identify opportunities for cost reduction: Analytics and transparent data will help you to identify trends in price variances so you can identify areas where you're spending more than necessary. And you'll also spend less time with procurement data, immediately saving your bottom line by freeing up employees to perform more essential work.
- Improve existing systems with minimal overhaul: Slowed production due to implementing new systems– and then training employees on the system– is a significant cash leak. But a control tower isn't designed to replace your existing system. You can couple it to your tech stack to perform unique and necessary procurement analytics to maximize procurement without a significant slowdown.
- Minimize supply chain risk and dependence: Clear data visuals ensure companies can notice and address changes or disruptions quickly– and maybe even anticipate them before they hit. Particularly in a challenging global market, now is a great time to invest in supply chain risk management.
Successful Multi-Enterprise Commerce Depends on a Powerful Tech Stack
Multi-entity finance is incredibly difficult to manage, particularly if you want a tight turnaround. That's why one of the foundational pillars of complicated corporate finance is robust financial applications.
Your financial tech stack will improve report integrations, reduce manual errors, and automatically generate complex reports. It will also provide continuity in methodology and organization from the beginning, significantly reducing the need to standardize data at the end of the year.
At Cofi, we provide high-quality software with live integrations, forecasting abilities, and much more. Request a demo today!