Innovation is often driven by two forces: the makers of technology pushing the market forward and the receivers of that technology bringing demand for better solutions. As eProcurement follows this path, FinTech firms are driven by a desire to innovate and a need from companies — both small businesses and large ones — to ensure procurement is a strategic part of the enterprise, with positive results on the bottom line.
But Jemin Patel, director at eProcurement company ProcurePort, says the middle market can get lost in the shuffle.
“The middle market right now is operating with legacy processes, mainly because of the complexity of implementation,” Patel recently told PYMNTS. “We get calls from companies that have a very small transaction volume but are still looking to automate.”
Like other companies, the middle market is showing increasing demand for digital solutions, but many companies still rely on paper- and email-based functions, including purchase orders, invoices, request for proposals (RFPs) and request for quotes (RFQs). Patel noted that, while companies are innovating in the eProcurement market today, few are paying particular attention to middle market needs.
“It’s not that the needs of the middle market are different,” he said, “but the middle market has been left out because players are focusing on the big guys.”
That doesn’t mean the eProcurement industry can continue to make progress while ignoring the middle market, though. According to Jemin Patel, mid-market firms are embracing the change that comes with automating processes, and that effort is now spilling over to the procurement function.
“What’s happening is that doing business the way they used to is no longer viable,” he said, adding that a lack of transparency and efficiency are forcing businesses to reevaluate their procurement strategies.
“The mid-market may not be using these tools in procurement, but they’re automating in other areas, like marketing and sales,” the director said. “They’ve been doing that for some time, and they’ve seen the benefits, so they’re more open to automate procurement as well.”
“Automating in other areas made them more comfortable doing so in this department,” he continued. “It makes it easier for them to transition out of legacy operational methods.”
The eProcurement industry is beginning to catch up to the demands of the middle market. Earlier this month, ProcurePort announced new pricing tiers designed for the mid-market client, allowing companies access to affordable, automated procurement tools like procure-to-pay software and eSourcing software that can still be implemented into existing systems and processes without the complexity of solutions designed for larger corporates.
But as innovators do so, they’re also fielding even newer technologies that have the potential to shake up eProcurement. Patel said ProcurePort will be looking at analytics closely in the coming years.
“We’re going to focus more on business intelligence,” he said. “Solutions offer charts and graphs, but we’ll focus on trying to make sense out of it, to provide more intelligent reporting.”
As for other technologies? Well, Patel said, just as the middle market begins to explore more sophisticated eProcurement technologies, the eProcurement industry itself still has a ways to go before it gets comfortable with some of the more innovative tech out there.
“When it comes to blockchain, the industry isn’t really looking at that right now,” he said. “There is a lot of good technology out there, but it will be some time before it becomes mainstream in procurement.”
“Procurement is still behind the curve; it’s still trying to put the end-to-end pieces in place,” he continued. “Until that happens, really large companies — Fortune 500 and Fortune 1000 companies — may be introducing blockchain and Big Data within their procurement platforms through third-party tools. But in the mainstream, procurement is quite a ways away from benefitting from those technologies.”