• Cybersecurity and data protection (82%)
• Human capital, diversity, and talent management (50%)
• Macroeconomic and geopolitical uncertainty (46%)
• Changing laws and regulations (44%)
• Digital disruption, new technologies, and artificial intelligence (38%)
• Climate change and environmental sustainability (37%)
• Business continuity, crisis management, and disaster response (36%)
• Supply chain, outsourcing and sub-supplier risk (34%)
• Financial, liquidity, and insolvency risks (28%)
• Corporate governance and reporting (25%)

Source: Risk in Focus 2023

Optimal management of procurement risk begins with supplier management. CPOs and Purchasing Directors should work on both awareness, i.e., knowing the risk factors, their priority, and their estimated impact on business assets, involving the C-Suite, and readiness, i.e., playing in advance with an action plan that responds to different risks using classic risk management methodologies (eliminate, reduce, transfer and retain, depending on the type and urgency for the business).

The only way to do this is to start with data: a data-driven approach is the foundation of any risk management technique you choose.

Choose Online Procurement, the effective risk management tool for your procurement department

Assigning a sustainability rating to a supplier can take place in two stages:

• At the screening stage, requesting information and documentation as part of the qualification process
• At the contract execution stage, as a reward requirement, through the calculation of dedicated KPIs.

In each of these two stages, it is the supplier himself who enters the required data through questionnaires and checklists, which, once completed, feed into the defined KPIs.

An advanced scoring system also allows requirements to be weighted differently, calculation methods to be fine-tuned, and requirements and required certifications to be diversified by commodity category.

Simplify Vendor Rating with Online Procurement >>

According to a Gartner survey of 275 global supply chain executives, improving supplier performance is one of the top priorities that procurement executives want to invest in to ensure supply continuity and create value.

For procurement professionals, dealing with suppliers is their bread and butter, but transforming that relationship into a true partnership that goes beyond simple negotiation requires commitment, transparency, and trust on both sides, as well as a solid core strategy.

In fact, supplier management is a set of coordinated and complex activities that includes sourcing new companies and professionals, the qualification process, the management of negotiations and orders, the segmentation and evaluation of their performance, the execution of contracts and payments, and risk mitigation.

Only a digital, centralized solution such as Online Procurement can truly help buyers simplify supplier tracking throughout the collaboration and maximize benefits.

1. Define business objectives: Aligning the short- and long-term objectives of the procurement department with those of the company and its key stakeholders is key to making procurement processes contribute to the business strategy and simplifying the analysis of the results achieved.
2. Establish qualification criteria: Identifying the requirements for each commodity category is not only functional for the qualification process but also helps streamline and homogenize the way they are handled.
3. Centralize information: A comprehensive view of each supplier’s data, documents, risk profile, rating, and order history supports decision-making and significantly reduces the time spent on manual audits.
4. Segment suppliers: The theory behind supplier relationship management recommends ranking suppliers according to their strategic importance to the business, performance, and risk factors, and creating specific goals and metrics for each segment.
5. Select KPIs: Working together on common and objective metrics allows both parties to monitor progress and difficulties with greater transparency.
6. Access up-to-date products and pricing: Direct access to products and price lists updated in real-time by the suppliers themselves speeds up purchasing processes, standardizes procedures, and reduces costs through economies of scale.
7. Keep track of communications and documents: How often do important negotiation details get lost in email exchanges? Centralizing communications and documents in a digital repository makes it easier to find information and keep everything up to date.
8. Monitor performance: A system for evaluating performance from an operational perspective – indicators such as delivery time, contract compliance, etc. – but also from a collaborative standpoint, based on qualitative parameters, makes it possible to identify the most reliable suppliers and optimize purchasing costs.
9. Risk prevention and mitigation: to ensure continuity of supply, it is essential to know which suppliers could cause bottlenecks or disruptions, and to proactively monitor the risk profile: financial, geographic, ESG.

We devote a separate section to supplier qualification and onboarding processes because they are the foundation for any procurement team to optimize costs, reduce supply-related risks, and improve internal efficiencies.

The Online Procurement suite provides flexible tools to better organize and interact with your supplier network, making request validation and documentation control activities faster and more accurate.

Digital Supplier List Management

Online Procurement provides extensive capabilities to customize the classification of suppliers into different lists and/or product categories, with ad hoc qualification requirements for each type of supplier. Once the requirements are set, the suppliers themselves complete the master list.

Qualification Request Management

On the platform, buyers can easily and intuitively qualify suppliers with a single-screen view of the data and documents entered by the supplier in the request form.

Single Digital Archive and Document Review

Documents, communications, and supplier-specific performance and risk KPIs are collected in convenient digital files, with an integrated system of automatic due date reminders to reduce the workload of the purchasing department.nze.

It is estimated that in manufacturing companies, purchasing accounts for about 50-60% of the turnover: identifying the best suppliers in the market and in the relevant category is, therefore, a key lever for a cost reduction strategy and, in particular, for reducing the total cost of ownership (TCO), one of the most important procurement metrics.

Among the useful methodologies for reducing costs, not in the sense of simply “cutting” but of optimizing from a development perspective, we highlight 3.

The success of a corporate procurement strategy is not only determined by reducing procurement costs but is primarily influenced by the quality of the relationship with the company’s supplier network and by its size. From global corporations with thousands of suppliers to SMEs with a smaller supplier base, every company needs to optimally manage its buyer-supplier partnership to best meet the expectations of its customers.

As early as 1983, Peter Kraljic, a consultant to the multinational McKinsey corporation who is credited with coining the concept of “supplier relationship management” (SRM), stated in a famous article published in the Harvard Business Review that the purchasing department should focus on strategic supply management, rather than repetitive operational tasks. A seemingly simple message that almost four decades later sounds remarkably relevant today.

US research by IDC Custom Solutions in 2020 estimates that up to 50 percent of a company’s value may depend on its supply chain’s strength and relationships with those who populate it. In a historical context characterized by high uncertainty about economic trends, rising inflation, and an increase in unforeseen – and potentially disruptive – external events on the supply chain such as the current one, this percentage may already be estimated downward.

So, let’s take a look at the three basic steps with which to build and manage a supplier network that is reliable, collaborative, and aligned with one’s business goals.

The first step in efficient supplier management by the procurement department is to analyze the current supplier base and actively scout for new suppliers with the desired profile. Analysis and scouting, in combination with expenditure planning and strategic sourcing, also form an excellent basis for a sound procurement strategy.

Online Procurement is the software solution with which SMEs and large companies can better manage their suppliers and establish successful partnerships.

Digital transformation of procurement processes is essential, the stakes are high: loss of customers, reputational damage, higher costs, reduced customer service levels, lack of compliance, delays in projects, or the execution of business strategies are among the riskiest consequences of supply chain problems or disruptions.

Secure your supply chain with more agile, competitive, and transparent supplier management

With no obligation, we will talk together about your procurement processes and how we can help you optimize them most effectively.

A customized platform, shaped around the business needs of efficiency and savings, is what we have built with ALIA over years of collaboration.

Strengthened by the implementation of a customized and more efficient supplier qualification and evaluation system, as well as the automation in the management of tenders and contracts, ALIA has managed to strengthen productivity and build stronger partnerships with suppliers.

Thanks to the implementation of a custom and advanced Rating system, dedicated to evaluating suppliers based on specific needs and criteria, we have been able to minimize the manual activities of the Procurement Officer, automating supplier assessments and associating evaluations to specific events generated within the system.

The results were substantial right from the start: greater visibility on supplier performance generated valuable purchases and significant savings.

We have supported STET during the transition to a digital and agile procurement platform, streamlining all processes and collaborations with suppliers.

The collaboration with DigitalPA has been very beneficial. We have successfully digitized our supplier assessment process and optimized all purchasing processes, generating significant savings.

The supplier rating optimization and digitization project was developed in collaboration with the University of Trento

STET has been using the Online Procurement platform successfully for over two years and confirms its trust in DigitalPA by choosing different software including Legality Whistleblowing.software.

Lega Calcio Serie A, involved in the management of the top division of the Italian football championship, has appointed DigitalPA as a technological partner to completely digitize the auction calls for international and national TV rights.

Thanks to the technological infrastructure and innovative workflows, Online Procurement was preferred being the only platform able to guarantee a Secure Digital Proposal, a condition of primary importance for a company of around one and a half billion for each football season.

A multilingual platform with a simple and intuitive interface and highly specialized yet timely consultancy support were the key reasons why Lega Calcio Serie A has agreed to renew trust and manage all the procedures for the assignment of international TV rights with us.