Benefits and concerns related to e-procurement
Silf Insight interviewed Cloudia about the most prevalent concerns we have come across when discussing with our customers about digitalization of procurement and contract management.
What benefits will my business gain from the digitalization of procurement?
Digitalizing procurement brings several benefits to organisations looking to automate their manual procurement processes. First of all, you get better control organisation-wide of your procurement transactions. It also simplifies the purchasing process and increases transaction speed and reduces the process costs. Through electronic solutions, you are able to better manage your relationships with suppliers, reduce maverick buying and standardize processes. Additionally, the e-procurement process eliminates unnecessary activities, reduces the amount of paperwork, rework and errors, and allows procurement professionals focus on more valuable tasks.
At Cloudia we work closely with our clients and share their realities. This enables us to provide solutions that have the potential to change the way procurement teams drive new revenue, identify savings, improve compliance and mitigate risk.
How does it help me as a purchaser to become more effective in my day to day work?
Our solutions aid you in the planning, management, guidance and follow-up of the whole procurement process. It simplifies and speeds up your work, making things fast and smooth. Our services also ensure your procurement process is followed and decrease the amount of routine work and margin for error. You can easily track the sourcing lifespan in real-time. All the data generated from any given sourcing process is cleverly stored and accessible for analysis. And being registered in our Marketplace, you`ll have access to an enormous amount of trustworthy suppliers, whenever you need them.
Can you give an example of a good implementation and the effects, what have they gained?
With our assistance, procurement units have saved a significant amount of time and money. For example, more than two million euros were saved in one single healthcare procurement operation by the City of Helsinki, and more than three million euros in one single contract procurement case. Many of our clients have also achieved thousands of euros in savings; for example, in multifunction, IT and network device procurements.
One of our customers used to have more than a five weeks long procurement processes realized by two people. They spent the first two weeks by opening the offers and the next few weeks by comparing and calculating the details. A lot of time was also spent in asking for the missing information and attachments. This process was not cheap neither inspiring. After digitalizing their procurement, the whole process now only takes five to ten minutes. Not to mention that their decisions are now based on equal, open and reliable information. And people are more than happy to concentrate on creative tasks that only humans can do, improving their motivation and satisfaction.
Can you mention some of the key factors for a successful implementation?
We recommend starting the digitalization of procurements by analyzing the initial situation and appointing a responsible person for the implementation process, e.g. an internal Project Manager to collaborate with Cloudia’s Project Manager.
It is good to keep in mind, that the implementation of any new system requires commitment and learning, regardless of the type of a system. Therefore, the purpose, objectives and benefits of the system should be discussed internally in a clear manner. When the system is deployed in the company, the key individuals are already aware of the demands and importance of the project.
Gradual implementation of the system allows organization to take the system into use at the pace you are comfortable with. There can be pilot units or teams where to start introducing the system before rolling it out across the whole organization.
A good service provider knows what type of support and user training to offer its customers: at Cloudia we have experience in executing more than 500 service implementations within the last couple of years and we can therefore provide your organization with implementation expertise and project management skills to ensure each project is successful.
How involved do I need to be, meaning; How prepared must I be in order to make this happen?
As mentioned above, the implementation of a new system always requires commitment and learning. However, as we have put great emphasis on usability of our services, they are easy to take into use.
When introducing new technology or services, it’s important to take into account a right mindset which is open to a change. Right mindset creates better conditions for the adaptation of the new system and the outcome generally proves better and happens at a much quicker pace.
Last but not the least: What happens if we don’t get digital?
When the world changes as rapidly as it does today, to stay relevant and to stay in business, it’s no longer an option or a nice-to-have thing to go digital. Digital revolution is unstoppable and inevitable. In procurement as well. According to the Hackett Group, 84% of procurement departments believe digitalization is the next step for their industry. At the same time, ‘born digital’ companies are adopting new technologies at speed, leaving late adopters behind.
However, digitalizing procurement need not be a challenge. We see it as your greatest means for success. It gives you the opportunity to upgrade your role from tactical procurement department to one that provides real value for the business and significantly improves business performance.
In today’s hectic business world we all need partners to succeed. So is the case when digitalizing procurement and contract management. When choosing the right partner, we all want to work with people you can trust. And people who have experience and results to show for it. At Cloudia, we know what lies ahead for you and how to help you stay ahead of the competition. We can work with you to transform your business but it doesn’t have to happen overnight. Cloudia procurement solutions have been developed for a digital journey that is gradual and effective. The most important thing is to take the first step. Then to invoke the old proverb: don’t be afraid of going slowly be afraid only of standing still.
What lead you to focus on electronic procurement, what is Cloudia’s background?
Cloudia exists to meet the needs of its clients. Our pioneering journey in the field of digital procurement systems began in 2008 when we implemented digital request for proposal and a sourcing management system for the Procurement Unit of the Joensuu region. The system was first of its kind in Finland. Following our successful precedent, other procurement units in Finland became interested in the possibilities that digital procurement provide. We soon realized we were carrying out systematic development work to create solutions related to design, sourcing, electronic auctions, contract cycle management and micro purchase services, among others, in cooperation with several procurement units all around Finland. As a result, in 2010, the Procurement Unit of the Joensuu region, became the first procurement unit in Finland to fully adopt a digital sourcing process. It was also the first unit in Europe to put all of its procurements out to competitive tender digitally.
Over the last ten years we have deployed hundreds of procurement solutions and we are proud to have as our clients some of the best-of-breed companies across different business areas all around Europe, both in corporate and public sector. Today we offer a comprehensive Source to Contract-portfolio of solutions for eProcurement and contract management: Cloudia Planning, Cloudia Sourcing, Cloudia Contract and Cloudia Supplier Management. Our services have more than 200 000 users, and over 40 000 tenderings have been made through them. Additionally, more than 20 billion euros worth of purchases are made through our Marketplace every year.
Our success has been contributed by the unique business ecosystem of Finland: We have the strongest digital knowledge capital in Europe and the workforce that has the highest proportion of ICT specialists in the world. On top of that, Finnish companies are number one in the use of cloud services.
Currently our strategy is to focus on the international markets, where our solutions are in high demand. For that reason, we have, for example, opened our Middle East headquarters in Dubai.
Cloudia is a global provider of digital procurement process performance solutions. Consistent growth of +50% for the past 4 years indicate our excellence in the business. Our comprehensive product portfolio includes data security certified and easy-to-use solutions for both strategic and operational aspects of procurement – eSourcing, Contract Management and Supplier Management. Furthermore, we provide a digital marketplace intended for suppliers and buyers to network, where the annual procurement volume exceeds EUR 20 billion. Cloudia’s dynamic, cloud-based services help companies respond to the challenges of the information age and to make use of the growing amount of data simply and effectively. Our services can be produced using Equinix data centers, on five continents and using over 200 nodes.
For the second time in row Cloudia attended a Supply Chain Outlook event in Stockholm, Sweden on 29th November, 2018. The annual event is organized by Silf Competence, a leading foundation in Sweden and Nordic region providing education in skills development & education within Purchasing, Logistics & Supply Chain. The interview was carried out by Silf and was publish in a slightly different order in Silf Insight November 2018 issue.
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