Why ‘Orchestration’ Is Critical to Supply Chain and Procurement

March 17, 2023

For months, economic conditions have indicated a looming downturn, leaving organizations everywhere to consider how they can best prepare for uncertainty and weather the storm. Many business leaders are earnestly seeking ways to avoid drastic cost-cutting measures, while others have already begun taking these steps. 

As decision-makers continue planning for 2023, they should look to implement changes that improve resiliency (against supply-chain disruptions), visibility (into spending and budgetary considerations) and agility (to adapt to changing conditions). When it comes to procurement and supply chain management, ensuring orchestration across systems and departments is a key area of focus. Orchestration offers the ability to break down siloed workflows and create bridges between applications and users in order to eliminate complexities. When implemented as part of modern digital automation platforms, it becomes vital to improving the procurement experience, and will be a critical factor in managing budgetary constraints. 

Many of the hurdles that organizations face in procurement are due to their traditional reliance on fragmented, siloed or manual processes. This not only hinders collaboration across the organization, but can result in uncontrolled maverick spend and reduce procurement teams’ visibility into spend under management. It can interfere with the speedy and agile workflows that today’s business users demand, and make it more difficult to comply with regulatory requirements. And it can result in a broken user experience, creating friction between business users and the procurement team.

The larger and more decentralized a company is, the worse these problems become, increasing conflicts between the desire for agility and the need for compliance and control.

The goal of orchestration is to combat these challenges by digitizing or automating procurement and supply chain workflows across systems, enabling unified collaboration and engagement between business users, suppliers and other stakeholders. Without the right orchestration, a poor workflow can result in bad data and lead to bad business decisions. The obverse is equally true: Optimized workflows generate high-quality data from user actions and integrated systems, and make it easy for business users to consistently make better decisions and drive extraordinary business impact.

Newly orchestrated “smart” procurement workflows reduce cycle times through automation, and streamline how a company onboards and engages with suppliers. They increase visibility for finance teams into spending and commitments. And they help organizations to scale operations to meet legal, compliance, finance and other regulatory requirements more swiftly.

Procurement organizations should focus on improving orchestration in three areas: data entry, access and visibility across business applications; procurement and vendor engagement across departments, and the overall supply chain workflow.

The most straightforward opportunity is to use orchestrated workflows to create a single, unified entry point for stakeholders to engage with procurement across their business applications. This is important from several perspectives:

  • Organizations may have multiple, fragmented systems and applications that touch procurement — and thus need a “single point of entry” for engagement. 
  • Contrary to traditional procurement notions, modern procurement is not necessarily a linear process. There may be different sub-processes that constitute an engagement for a given procurement process. Users need visibility into the statuses of these sub-processes and how they’re executed.
  • Different parts of the larger procurement process may be interdependent (such as finalization of a contract before placing an order) and lack a unified view. From a user perspective, these interdependent parts can lead to fragmented context, application switching and a poor user experience.

When orchestrating procurement processes and vendor engagement across departments, there are multiple sub-processes involved. Benefits include:

  • Orchestrated workflows can be used to gain control (and thus, visibility into condition and state) across these different fragmented processes. 
  • Organizations with frequent process changes can easily implement a self-service approach, replacing the need for time-consuming change requests. 
  • Organizations can digitize and automate spend related to complex service requisitions and specialized products — spend that otherwise tends to fall out of band and get handled manually.

The ultimate opportunity is to orchestrate the comprehensive supply and procurement workflow. Benefits include:

  • Companies can establish a composable framework of underlying applications via integration. For instance, when it comes to managing supplier data, orchestrated workflows can help with providing a centralized repository for storing and accessing supplier information.
  • Companies can avoid the duplication of data, so that relevant information only shows up once for each supplier, and ensure that the necessary information is readily available to help with supplier onboarding.
  • Taken to its logical extreme, workflow orchestration can be used to combat supply chain fraud and promote partner collaboration.

In the face of economic uncertainty, companies should first look to bolster their existing systems to improve resiliency, visibility and agility. Orchestrated workflows can result in stronger and more nimble organizations, with better control over supply-chain activities. Orchestration can also enable business leaders to significantly enhance the procurement experience for business users and stakeholders, corralling maverick spend and making informed spend decisions. Ultimately, it can help a company to boost its bottom line, and position it to take on whatever economic headwinds may come. 

Sudhir Bhojwani is co-founder and chief executive e officer of ORO Labs.

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