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Volatility: fertile ground for innovative ideas

21 September, 2022 | By Unite

We live in uncertain times. Businesses are facing enormous changes and need to cope with complex circumstances both locally and globally on a day-to-day basis. The much-reiterated acronym VUCA can best describe the current situation Volatility, Uncertainty, Complexity, Ambiguity – “a roller-coaster market” as defined by the New York Times.

The world is changing, and there’s no alternative but to fundamentally adapt and evolve structural processes, specifically in procurement operations. Adjustments must be made keeping in mind long-term solutions. And our mindsets need to be changed so we can start seeing the opportunities that come with these adjustments for making businesses, particularly the procurement industry, future-proof.

An obvious example is the still-popular framework contract and how prices are determined within its gambit. Now let’s compare this to the evolution of the stock exchange.

Trading firms were already going digital in the 90s. However, the US real estate bubble burst in the 2000s, September 11 attacks, and market volatility resulting from all its aftermath resulted in a globally integrated financial market with new legal and reporting frameworks to protect investors. This amount of digitisation also created transparency in financial markets. Technology has finally transformed the traditional trading floor into a digital format.

Crisis time is when that perennial question resurfaces; is the glass half-full or half-empty? Experience has taught us this is the time when gaping holes are filled with innovations.

Times of crisis are fertile for implementing ground-breaking ideas.

We’re at that cusp now; innovations in the procurement industry will happen. Framework contracts bound by long-term price agreements will soon be outdated, especially in a supply chain environment characterised by uncertain delivery times and inflation.

  

The world is changing, and there’s no alternative but to fundamentally adapt and evolve structural processes, specifically in procurement operations.

Unite

It makes sense for prices to be negotiated on a day-to-day basis, buyers and suppliers are already looking for new and efficient ways to get this done. They want transparency, to know how prices are determined under these circumstances, and to understand the criteria for price-finding decisions.

A year from now, we’ll see that dynamic pricing based on digital solutions will have made a significant contribution to solving this problem. It enables procurement to bolster its core task of connecting people in a strong, resilient and ever-growing network, and to help get what they need at the right time.

Procurement is the heartbeat of a market and has a strategic role in the economy. That means it also has the power to bring the economy back on track and make a difference.

The principles and functionalities for dynamic pricing are there and only need to be implemented into current purchase-to-pay processes. Solutions already available today, for example, on the Unite Platform, are based on digitally comparing suppliers and their products in a criteria-based, automated way. Soon, we’ll also be able to compare sustainability criteria based on this concept. And it will become natural for companies to evaluate what criteria matter most while making operational (buying and selling) decisions.

Now is the right time to pave the way for a more sustainable future.

To catch the fireside chat with Unite CEO Dr Sebastian Wieser, register here.


About Unite

Unite connects the economy for sustainable business. Its pioneering B2B platform brings buyers and sellers together for mutual benefit. With its digital solutions, Unite enables effortless sourcing, buying, and selling, transacting, and collaborating. Unite’s scalable and flexible infrastructure helps facilitate connections, supporting business continuity and supply chain resilience. Its ever-growing ecosystem covers buyers, suppliers, manufacturers, distributors, technology partners, and networks. Built on Mercateo’s prominent spot-buying expertise and history, which began in 2000, the company has already established strong foundations: fair competition, trusted partnerships and European data sovereignty. Unite transforms B2B commerce and strengthens local economies – by adding and sharing value for a better business and a better world. In December 2021, Unite was awarded the EcoVadis Silver rating for its CSR initiatives.

   

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