One of the emerging solutions for tail spend purchases is the technology-based master vendor platform that global companies are pacing forward to learning and deploying
Various industry verticals like Pharmaceutical, Automotive, CPG, Aerospace, Food & Beverage, Banking, and Financial Services are continuously exploring tech-backed vendor platforms to observe maximum tail spend optimization.
Organizations have started using the technology-based master vendor platform effectively, while some are still exploring and trying to comprehend the idea of vendor platforms in terms of their operations, procurement process, and associated trends. With the surge of technology, the master vendor platform can effectively channel and optimize the tail spend purchases.
“Many businesses have begun to recognize the need for focussing technology to optimize tail spend management. Using a technology-based vendor platform, a business can achieve their optimization goals and improve its overall procurement by working more closely with suppliers”, said Sujeet Kumar R, Senior Research Analyst at Beroe. “The task is for the buyer organizations to distinguish and draw in with the potential technology-based master vendor platform service providers that map to their distinct needs and requirements. A greater part of the top organizations in mature markets like North America and European locales are continuously investigating this choice.”
Technology-based master vendors have machine learning and artificial intelligence-enabled services that reduce TAT for low-value purchases along with extended payment terms facility. The purpose behind this is a single-creditor business model, which means one supplier managing thousands for the corporate customers that charge customers on every transaction via platform-based tail spend categories.
Master vendor platform is an emerging game plan that works with single PO entry portion courses of action against various suppliers. The industry reception rate seemed to be at a low to medium level. Many organizations today are focusing on controlling, getting, and channelizing their acquisition spend. In any case, the tail spend procurement demands enormous human resources. It offers a solitary merged spot to connect with track and pay for tail spend categories like consultants, freelancers, advertising, accounting, etc.
There are four ways of tail spend optimization: time-saving & increased compliance, management control, vendor consolidation, and cost savings & increased spend under management. These are four definite ways technology-based master vendor platforms can optimize tail spend, giving organizations better control of their spending and providing them with more cost-saving opportunities.
The procurement of technology-based master vendor platform service is acquiring critical significance, particularly among top organizations in developed regions. It helps to reduce any expense, rationalize vendor database, and enhance tail spend.
The demand for technology-based master vendor platform service is expected to gain huge momentum and worldwide recognition in the coming years. It comes with many benefits like effective and streamlined tail spend purchases management. In addition, it ensures no PO, no Pay policies, and increases the days payable (Extended Payment Terms). Despite the challenges in implementation, experts believe many companies will follow suit to leverage master vendor platforms to ensure seamless business activities.
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