The procurement industry has changed rather significantly throughout the past years. These changes have come about from the addition of technology, that has helped to play a critical role in how the future of the industry is going to look. From data management to customer experience, through adding technology into this sector, the procurement industry has become even more successful in being able to supply the most satisfactory and reputable services possible.

What Is Procurement?

For those who are unsure of what exactly is procurement, procurement is the process of planning and purchasing goods within an industry. This covers every step, from agreeing to terms, acquiring goods and working with external businesses. These tasks are often completed through a competitive bidding process, helping companies to select goods at a high quality and reasonable prices. While also agreeing on the workload and time frames, within a competitive industry.

Rather than focusing on the swapping of money, procurement, however, will cover all the initial negotiation steps. Working to create the most cost-friendly prices for the benefit of your company.

Because of these first steps being the most crucial, procurement is a vital part within all industries, being made even more intelligent through the development of digital procurement. It has been said that 85% of procurement industries believe that by including the use of technology within procurement can help to drastically change the way in which it works and the quality of results created throughout the years ahead.

What are the Types of Procurement?

There are two main types of procurement that can be incorporated into the running of your business, each depending on the type of service that you require and offer customers.

When choosing and deciding which type of procurement is best suited to the needs of your company, it is advised that you look at each option individually and how they can meet your expectations and business goals.

The two types of procurement are:

  • Direct Procurement– This type of procurement covers the sourcing and gathering of resources and materials that can be used within your business. Whether sourcing materials for your factory or an external company to help offer a service that your business requires, direct procurement is a beneficial addition to your company.

The types of businesses that are more inclined to choose this type of procurement are those that are involved within the manufacturing or construction industry. This is because their business will be widely run on the supply and demand of goods, something that procurement can help organize while reducing unnecessary costs.

  • Indirect Procurement– This type of procurement focuses more on the technology and services that a company would use to help run and function as a business.

The businesses that would take on this form of procurement are those with a spend rate that focuses on administrative or internal payments. Because of this, the type of sectors that can have this kind of procurement, range quite widely. From facilities management and HR to companies that work closely with warehouse operatives and building utilities, such as running water or power.

We have looked at the two different types of procurement, the time has now come to look at how the industry has developed through the help of digital transformation within the procurement industry. By taking a look at the benefits of digital transformation in procurement, we will evaluate the benefits and the differences that this function can have on your business.

Analytics and Data

With the development of digital transformation in procurement, procurement can quickly become a trusted and influential business advisor. Offering an efficient and specialist service, procurement, when incorporated into your business can help to analyse data and results quickly and efficiently. Through the rise of digital procurement, this feature can filter large volumes of information, from a selection of different sources for the benefit of the company.

Those that would benefit greatly by the aid of technology in analytics and data are those such as medicine, construction, retail and banking. Being digital allows big businesses such as these to have the capability to create new opportunities for themselves and analyse all data to benefit their individual needs.

The focus can go beyond internal, however. Digital transformation procurement can begin to focus on delivering new forms of market intelligence through a large range of reporting services. In doing this, the workforce can have a more sophisticated and accurate decision helping processes set in place for the benefit of the business.

Digital Supply Chain And Supplier Management

Digital transformation in procurement can easily change the manufacturing aspect of the business. Creating and offering the ability to integrate all data given by customers and distributors, procurement can optimize supply chain performance and captivating productions. By being able to do this, inventory costs and lead times can all work to better the customer experience and supplier performance.

By incorporating this function into your business, suppliers and customers can have a better relationship experience, with more deals and contracts being agreed and closed, helping to create an optimized end-to-end supply chain.

It is not only the supply chain that will benefit from the integration of technology. The supplier management will be able to exceed far further from this. Companies such as retail or even construction will be able to take on larger data analytics, working with huge amounts of customer, external and financial data.

By having all of these possibilities, the supplier can gain greater confidence in their work, management and resource processes, with deals, closed with an end-to-end full agreement set in place.

Processes and Tools

New digital technologies within the procurement industry can help aid many businesses with streamlining many of their processes. From the collaborations, engagement, negotiations, sourcing and management of services.

Due to each process being challenging and different from one another, each technology used can differ widely and create different impacts within the business. By incorporating digitally automated processes, it removes the requirement of manual interference and can work efficiently without human interruption. This will, therefore, create a sustainable workforce, will tedious tasks being completed by technology alone, rather than a human too.

Benefits will not only arise from reducing work time or costs. But it will also allow highly qualified procurement resources to stop completing repetitive tasks and start to focus on delivering a level of high-quality within the workplace.

Increasing Skills

The skill set required within the procurement industry is very likely to change through the addition of technology within the workplace. Soon enough, those who work in this industry will be able to take on a selection of different tasks. This is because the technology is quickly able to learn a range of skills at a basic, foundational level.

Embedding digital transformation into the industry such as automation can create a higher efficiency level and greater strategic elements. In doing this, there may be challenges in the workplace, as there would be with any drastic company change. This evolution will allow jobs to be created that are more suitable for a specific person and their skill set, while automation can take charge of their old daily tasks.

This process would be massively beneficial in a corporate based sector, such as administration or HR. As automation may be able to complete simple tasks such as answering emails, directing calendars and even working with IoT devices to control office lights and temperature. Tasks that an assistant would usually complete within their working day.


The stakes are high when incorporating the element of technology in the procurement industry.

However, embedding technology into the industry can have many benefits, helping it to be more efficient than ever before. Because of this, there is no reason why a procurement company should not at least try and create a technology enhanced workplace.

For example, the most important aspects of a business can really benefit and be streamlined through the simple addition of technology. From the processes and tools they use, their supply chain and management, analytics and data, and the skills in which the company can perform, digital transformation can be a huge benefit.

Make a change and incorporate the use of technology into your business and help ease the completion of everyday tasks.

Has your procurement industry gone digital? Share with us your opinions of going digital in the procurement industry and the benefits that you have experienced.

Sydney Tierney just recently finished her studies and is working her way into the world of content writing as a digital marketing assistant. She writes for clients that specialize in workstations, lifestyle and digital procurement.

Business stock photo by Panchenko Vladimir/Shutterstock