ServiceNow procurement software centralizes teams, processes

Jumping into the fast-growing procurement management market, ServiceNow debuted software that centralizes procurement teams and processes across an enterprise.

A new feature in the latest version of ServiceNow's Now Platform aims to simplify procurement management by centralizing multiple procurement teams, automating workflows and providing visibility into sourcing.

With improved automation and self-service capabilities, the Procurement Service Management offering in the San Diego release of the Now platform makes it easier for users to speed up source-to-pay processes using real-time benchmarking and service-level agreement risks. It also limits irregular procurement actions as well as improves poor procurement experiences using pattern matching and trend analysis, the company said.

"We've modernized the way to run procurement operations with the goal of redirecting the resources users have across all their procurement teams," said Colby Blakeman, director of product management with ServiceNow's procurement business unit. "This allows them to focus on more strategic work by automating repetitive, low-value and manual tasks."

The new offering works with SAP Ariba and Coupa Procurement as well as many home-grown procurement packages users have developed. ServiceNow's new software is compatible with other products through its Integration Hub technology, using low-code and no-code capabilities to connect workflows, Blakeman said.

Working closely with users, ServiceNow recognized that ERP systems are good at being a system of record where users can log an invoice and make a payment against it. But the process involved in producing or modifying such a transaction doesn't exist, Blakeman said.

"Suppliers having cash flow issues who make a request to get paid sooner typically send an email to an organization that will sit in an inbox waiting for someone to work on it," Blakeman said. "With this version, suppliers can pick up the request via email on behalf of the centralized procurement team, raise the request, and create a playbook that guides users through the process."

ServiceNow said many requests to procurement teams are focused on procuring goods and services. Consequently, the company focused specifically on automating simpler tasks including procurement status inquiries, supplier complaints and returns of orders.

"This product helps refocus teams on strategic issues by turning responsibilities for mundane tasks over to more self-service options," said Kirsten Loegering, vice president of product management, ERP Solutions at ServiceNow.

Genpact, a services provider specializing in digital transformation, handles procurement responsibilities for approximately 100 different clients, including a Fortune 500 firm. Those responsibilities range from handling routine transactions all the way up to negotiating agreements for clients.

The ability to offload routine transactional work, gaining greater visibility across teams is appropriately timed for [ServiceNow] users. But I'd be interested to know how easy it is to use on other existing procurement processes and software.
Patrick ReymannResearch director, IDC

"We have clients that take centralized and decentralized approaches to procurement, but we try to drive them toward centralization," said Steve Simko, global procurement service line lead at Genpact. "For instance, if a client wants to bring on a new supplier, he can check with the central team to see if the organization already has a supplier on board that provides what they need."

Given the wide range of services and support Genpact is responsible for, Simko decided on ServiceNow's product because it covers his clients' needs across the board.

"You can layer the [ServiceNow] product across a range of functions that procurement [teams] perform and all the white spaces in between," Simko said. "This allows us to help them with what system to choose, who is the right supplier, and how to work with that supplier."

One analyst agrees the new offering, one of a handful of products available in this growing market which includes Oracle and SAP Ariba, should serve traditional ServiceNow users well, particularly by centralizing procurement activities across multiple procurement teams.

"The ability to offload routine transactional work, gaining greater visibility across teams and being driven by workflow automation is appropriately timed for (ServiceNow) users," said Patrick Reymann, research director at IDC. "But I'd be interested to know how easy it is to use on other existing procurement processes and software."

Procurement Service Management offering will work with Gekkobrain, an ERP company ServiceNow acquired in 2021 which serves to extend the features of the company's Creator Workflow product. It is also complementary to Celonis' procurement software that helps users prioritize processes for automation, including source-to-pay.  ServiceNow announced a strategic partnership with Celonis earlier this year.

As Editor At Large with TechTarget's News Group, Ed Scannell is responsible for writing and reporting breaking news, news analysis and features focused on technology issues and trends affecting corporate IT professionals.  

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