Powering the Procurement Process with ServiceNow
- November 17, 2022
The ServiceNow platform changed the face of HR delivery, and now it’s about to transform the way procurement works.
The procurement department has always done its job, but few people outside those involved think about how that job is done. The business needs some equipment, the procurement team pulls together a shortlist, helps select the best fit, probably does some great negotiation, hammers out a deal, and as if by magic, equipment arrives.
But in the age of Amazon, where one-click fulfillment sets the bar for buyer expectations, the procurement team now finds itself unable to deliver that experience with its traditional tech stack.
Historically procurement is handled by cobbling together tools like a vendor list in Oracle, a contracts database, and a purchase order platform using email. But the extensive work and interaction between the procurement team and other parts of the organization demand deeper functionality.
This is where ServiceNow steps in to replace ad hoc workflows powered by email with an integrated platform offering granular insights into procurement.
Changing the face of HR
We’re about to witness the same transition in procurement that we saw in Human Resources.
Previously HR systems were disparate, with the human resources team driving the transactional process via email and phone calls. Employees needed to go through HR to access the HCM platform, such as SAP SuccessFactors if they wanted to change their benefits or update their address. Those changes would then need to be reflected in the payroll system, with the 401k provider and their staff records. This process creates busy work and hurdles for both HR and employees.
ServiceNow saw an opportunity to provide a single interface that allows employees to access the information themselves when they want to. Workers can fill out forms and change their address, name, or bank account via an online portal. ServiceNow then triggers the associated updates to other systems of record. Meanwhile, the HR team can focus on more strategic priorities.
Take another common HR process — onboarding new staff. Old-school onboarding relied on manual processes that were not integrated. Since the IT and HR departments had their own joiner flows, a new employee might be left without a configured computer on Day One simply because the IT team wasn’t alerted in time to commission it. That critical first week, when the employee should be training and feeling welcomed, went to waste — and probably left some employees underwhelmed.
ServiceNow eliminates these issues by streamlining the entire process, taking it off email, and giving each department an integrated onboarding workflow. The HR team may not have had a significant technology budget. Still, given the importance of a positive employee experience in staff retention, it’s clear to forward-thinking organizations that investment here will quickly pay dividends.
ServiceNow changed how HR works, and now they’re looking to transform procurement similarly. What makes for successful procurement? Maintaining contracts, skillful vendor risk management, purchase analytics, and making the transactional side of procurement smooth and easy. In short, procurement touches multiple departments.
Let’s take a common task for the procurement team — selecting a new vendor. When you need a new contract for a bid, there is a lot of work and communication with legal and other business unit stakeholders by email. ServiceNow can streamline the procurement process to make it effective and consistent. So now a purchase can seem more like an IT support request — handled on a ticket basis, pulling all the relevant information in, including the ticket’s status. Onboarding a new vendor is more straightforward since ServiceNow creates a better way for procurement to collaborate with other internal stakeholders.
For example, ServiceNow ties purchasing policy enforcement, asset management, risk and compliance, contract management, and vendor management together so users can be sure they never overstep entitlements to a contract. Users can also integrate point solutions and information from other platforms and tools. This delivers a global understanding of how procurement works and ensures that the different procurement elements are managed harmoniously, not separately, in silos.
Here are some of the benefits we’re seeing:
- Provides case workflow and functionality for procurement
- A transition towards a ticket-based system for procurement, with complete visibility that brings to status, triage times, and workflows, rather than in hidden email correspondence
- The system creates a record and forms a service management plan since responses and actions from any department are assigned as tasks in each group
- The external integrations allow vendors to interact concerning invoices — including receiving and sending status updates and requests.
- Increases efficiency by avoiding problems, such as buying the same item multiple times or paying different prices for a vital resource
- Ensures accuracy and compliance — ServiceNow will flag conflicting prices paid and contracted, creating consistency across the board
- Directs buyers to the right place and the right people to work with vendors by understanding parameters — sending requests to those best placed to handle them
It’s time to rethink procurement
Procurement touches many departments, including finance, legal, line of business, and operations. If procurement slows, the entire enterprise could suffer. Yet the procurement process is powered by spreadsheets, email, and routine heroism. Just as other departments have been overhauled as organizations see the actual value, a procurement system is rising to the top of the shopping list for many companies. ServiceNow is bridging a gap in the market for our clients as they aim to shorten their supply chains and make them more domestic, resilient, or sustainable.
The first step? Start by getting off email — and opening up the possibilities with a tool-agnostic procurement process.
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