Russian procurement digitalization market. TAdviser 2024 review

Interest in quick purchases and attention to NSIs

In 2024, the previously emerging trends were even brighter. In addition to import substitution, the main trend was the growing interest in rapid purchases of standard or low-capacity nomenclature. This has already led to the emergence and active development of B2B-Marketplaces.

The business wants to buy as simply as ordinary customers in the store do - quickly and without lengthy tender procedures, Olga Gromkova is sure.

Therefore, the focus today is on simple purchases literally in one click through the "basket," guaranteeing the speed of delivery, "she said. - We also see a growing interest in combining key procurement functions in a single space integrated with the customer's ERP and EDM, which is based on NSI directories.

Agora agrees that many managers have realized the importance of introducing an effective NSI management system and are actively engaged in its implementation in their organizations. Isource also noted the increase in demand for centralized nomenclature directories along with MDM solutions.

Information on the technical characteristics of the nomenclature becomes especially valuable when it comes to the search for analogues or the production of the necessary positions based on specifications, because in the current geopolitical situation in the procurement market, there is an urgent need to find analogues of materials and new suppliers.

Demand for on-premium

The on-premium model in the procurement solutions market is currently one of the popular ones. This is due to the concerns of customers regarding the vendor lock, says Konstantin Trofimov. This is especially noticeable in light of recent sanctions that have led to restrictions on access to licenses from some software providers.

Isource shared a similar observation: the vast majority of corporate clients are interested in the possibility of deploying solutions that process and store sensitive data (which includes SRM) not in the cloud, but in the corporate perimeter (on-premiere).

End-to-end automation and modular platforms

In most organizations, end-to-end automation of procurement business processes has not yet been implemented, which in the future may slow down the development and scaling of the company, Isource believes. Automation of procurement has long-term business benefits, and organizations are starting to invest in this area, said Daria Larionova.

According to her, the companies have formed a request for modular platforms for supply chain solutions, in which services for logistics, planning, inventory management, supplier portal, MDM, BI, WMS, TMS, corporate online stores, etc. can be presented.

The problem of underfunding in the implementation of boxed solutions

Many are not ready to spend money on SRM automation. This opinion was expressed by Mikhail Borodovsky, General Director of ETS + LLC. According to his observations, the procurement function for many companies is poorly developed, financed on a residual basis, managers do not see the need for its automation.

This year I do not see trends in rethinking the procurement function, "the expert said. - However, a simple understanding that automation can dramatically improve the quality of purchases can give companies significant benefits.

There is an opinion on the market that you can buy a boxed procurement solution and finalize it yourself, many companies advocate this approach. But this is a trap, says Mikhail Borodovsky. In practice, typical solutions are poorly studied by companies, they refuse to conduct surveys and subsequent consulting and writing technical assignments by procurement automation specialists, during implementation and refinement they also do not invest in consulting, poorly prescribe the main goals, do not take into account the current development of the procurement function, all improvements are trying to invest in the current budget.

The main failures of SRM implementation are underfunding, he stated.

Dominance 1C

There is also an opinion in the SRM market about the dominance of one supplier. We are talking about 1C.

It is believed that if the company operates at 1C, then purchases should also be automated at 1C. But this is a trap. To build an SRM system, you need to have procurement automation specialists, but most companies do not have them, "complained Mikhail Borodovsky.

The expert cited as an example a classic situation when the company has specialists who write in 1C, but they do not understand anything about procurement. Under such conditions, the quality of SRM systems cannot improve.

Here you need a government decision to limit 1C sales to the procurement function, - Mikhail Baranovsky is categorical. - To eliminate the impact of the 1C brand on professional priority.

Short on other trends

Among vendors, there is a tendency to provide customer companies with services for developing a procurement methodology. The ideal option for the customer is the situation when the procurement methodology is formed on the basis of three main elements: the customer's expertise, the vendor's experience and the objective opinion of an independent consulting agency.

Increasing attention is being paid to the convenience of working in SRM suppliers, not just customer companies. Convenience for suppliers has a direct impact on the speed of transactions, including passing inspections, qualifications, submitting commercial proposals and providing the necessary documentation.

The application of accreditation, evaluation, audit and management of the supplier rating system has become an important aspect of the work of companies.

The need to move quickly from familiar suppliers to new partners has forced organizations to focus on improving the process of verifying counterparties for reliability.

As part of quality assurance and operational risk minimization, companies are actively implementing qualification tools in various categories and conducting various other checks.

Procurement departments strive to immediately lay down comprehensive logic when performing tasks: rules for choosing suppliers depending on the amount, weight, volume of purchases, holding tenders through an internal or external trading platform, and so on.

The BPM approach to procurement is gaining momentum, which makes it possible to achieve coordination in the work of functional units through regulation and automation using modern ones. low-code BPMS

Companies are becoming more mature, more clearly understand their own process architecture, and how exactly information flows are moving, studying the best practices of solutions in the market.

The concept of purchasing management goes beyond the scope of the procurement business and gradually erodes. Similar in recent years undergoes document management, which has become for organizations a "circulatory system" that transfers data, shifting the focus from working on the documents themselves.

CPS integrate with domestic ERP systems and CRM, minimizing dependence on foreign software and reducing sanctions risks, introducing encryption and data protection methods.

Artificial intelligence

Recall that at the end of July 2024, TAdviser announced that Genia and predictive analytics are considered by specialists as one of the most significant technologies in the field of procurement and supply of goods. Also in this review, experts are unanimous in assessing the importance of artificial intelligence, as the market moves towards digitalization and robotization of the procurement function.

We are talking about reducing the role of a person in routine processes, when a robot or system can independently issue purchase requests and choose the most suitable suppliers, "says Olga Gromkova. - Buyers also urgently need price analytics services that, based on artificial intelligence, could evaluate, for example, the quality of the conditions proposed as part of the tender.

According to Konstantin Trofimov, trends are the introduction of robotization in procurement processes, the use of AI in analytics, bidding, when choosing the best offer. It is planned that AI platforms and algorithms will process large amounts of data, analyze market trends, predict prices and optimal trading strategies, which will reduce costs, increase efficiency and improve results in procurement processes. Automated bidding through robotization of non-human processes significantly reduces time and human error. However, this practice may be of interest to hackers, since automated bidding systems can contain large amounts of sensitive information about suppliers and contracts.

Daria Larionova said that simulation modeling technologies are actively used on the market, which are supplemented by AI, machine learning and software analysis with graphs of spatial networks to create digital simulation models (for automation and strategic vision of all processes for their subsequent optimization).

The use of AI in services for the procurement function in the future will be a prerequisite - Mikhail Borodovsky is sure.

Timur Davydov noted that AI and BI are gradually taking their place in the IT landscape of progressive market companies.

Rustam Ardavov, Director of the Procurement and Financial Control Department of BFT-Holding believes that the growing importance of AI and machine learning will lead to the fact that AI will become a key tool for data analysis and risk management, ensuring the competitiveness of Russian procurement management systems on the world stage.

Attention to the functionality of analytics modules

Customer companies that have been operating on electronic platforms for the past 3-5 years have accumulated extensive data on previous trades, purchased items and prices for previous periods. An important task is to analyze this data, which allows you to understand how purchases took place in the past, and what conditions exist in the market at present. Effective data analysis is assisted by analytics function modules to extract valuable insights and make more informed strategic purchasing decisions. Such information was shared by Konstantin Trofimov.

Short on other technotrends

• The key factor is not the task of buying as cheaply as possible, but the desire to increase the speed of work without losing the favorable purchase price (this is facilitated by B2B-Marketplaces and corporate online stores).
• The implementation of a process configurator based on the Business Process Model and Notation (BPMN) business process modeling language in the field of process management and configuration within SRM allows you to easily customize, modify, and optimize supplier management processes to meet unique business needs.
• The movement of the procurement market towards catalog procurement is becoming increasingly important in the context of digitalization and optimization of business processes.
• The existing trend in IT and cloud infrastructure shows the transition from traditional virtual machines to container orchestration using Kubernetes (K8s). Many companies are switching to cloud provider management services that offer managed services Kubernetes, OpenSearch, PostgreSQL, information security, S3 storage, etc.
• Some experts emphasize the advantages of the Supply Chain Control Tower analytical system.
• The market wants to reduce the cost of SRM and is going to use services for the procurement function.
• Creating portals for suppliers and own tender sites is one of the trends in purchasing management.
• Creation of ecosystems on the basis of Russian platforms: complex ecosystems will be formed that unite CPS and other business elements.

Forward-looking forecast

In the next 3-5 years, more than 50% of companies will switch to domestic procurement software. The advantage can be obtained by those companies that are the first to implement domestic software, digitalizing procurement processes. It is possible that in the coming years about five leading vendors will stand out on the market. Konstantin Trofimov shared such forecasts.

Within a few years, there should be a significant increase in the use of SRM systems, Mikhail Borodovsky believes.

Preferences are given and will be given to those products that can be customized for themselves without the participation of the vendor, Timur Davydov believes.

The market is waiting for the simplification of trading procedures, the development of end-to-end automation of procurement will continue, Olga Gromkova foresees.

A mature business sees that the lack of interconnection of all stages of the process directly affects the loss of efficiency, she is sure. - This leads to the gradual implementation of seamless solutions that can increase the transparency of purchases, reduce losses and costs, and increase the speed of work.