What is Procurement Orchestration?

Is it just another buzzword? We’re seeking to establish what procurement orchestration is and (more importantly) what it isn’t, so you can see through the sales pitch.

By Hugo Britt | April 18, 2024

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If you’ve spent much time listening to procurement software salespeople (lucky you!), you may have heard them kicking around the term “procurement orchestration.” If this has left you scratching your head, don’t worry – you’re not alone. An online search will reveal dozens of contrasting definitions and plenty of clumsy analogies involving orchestral conductors and violinists.

In this article, we seek to establish what procurement orchestration is and (more importantly) what it isn’t, to help you see through the sales pitch.

So, what is orchestration?

Before we get into procurement-specific applications, let’s start with a definition of orchestration from the world of software engineering, which is where the term comes from. According to Databricks:

“Orchestration is the coordination and management of multiple computer systems, applications and/or services, stringing together multiple tasks in order to execute a larger workflow or process. These processes can consist of multiple tasks that are automated and can involve multiple systems.”

“The goal of orchestration is to streamline and optimize the execution of frequent, repeatable processes and thus to help data teams more easily manage complex tasks and workflows.”

Hang on, that last bit sounds a lot like automation, doesn’t it? Well, the terms are related, but as Databricks explains, automation usually relates to a single task while orchestration is a tying-together of multiple (often automated) tasks into a complete, end-to-end process: 

“Automation is programming a task to be executed without the need for human intervention. Orchestration is the configuration of multiple tasks (some may be automated) into one complete end-to-end process or job. Orchestration software also needs to react to events or activities throughout the process and make decisions based on outputs from one automated task to determine and coordinate the next tasks.” 

In the procurement sphere, Spend Matters has published a solid definition for the term: 

“Orchestration is a way to connect and coordinate people, processes and systems across an organization. It goes beyond performing discrete transactions to facilitate the efficient flow of tasks and information over time and across agents [people and systems]. This includes facilitating each step in a given process, even if that step is in a different system or department, allowing teams and organizations to get work done faster and without frustration.”

“Orchestration is a way to connect and coordinate people, processes and systems across an organization to facilitate the efficient flow of tasks and information over time and across agents"

Ok, so what is procurement orchestration?

Spend Matters goes on to note that procurement orchestration is “meant to break silos and create bridges between applications, thereby making procurement complexity less visible or even disappear. By coordinating activities between human and digital agents and centralizing processes through a single rules and decisioning engine, orchestration provides stakeholders with a single, unified experience across all stages and steps in the procurement process.”

In a way, there’s nothing really new to this concept. Procurement thought-leaders in the digitization space have been talking for years about the need to break down silos, remove complexity, and to create a single source of truth. There’s also a focus on the user – making it easy for any stakeholder to complete their step in a process through a great user experience (UX).  

Still confused? Here’s what procurement orchestration isn’t.

  • Orchestration isn’t just about automating a procurement task. It’s about unifying every process step to create a single rules and decisioning engine.
  • Orchestration isn’t an integration layer that helps a new piece of software “talk to” an existing system.
  • Orchestration isn’t another word for a software suite.
  • Orchestration isn’t an add-on designed to fill gaps by sitting on top of an existing solution.

Instead, procurement orchestration involves building or acquiring a platform that enables better UX, boosts visibility, and helps us respond faster to change.

What should procurement orchestration address?

A good procurement orchestration platform should be able to coordinate the orchestration of procurement data, processes, and stakeholders.

All available data should be accessible by the procurement team to improve decision-making and enhance visibility. Many systems tend to focus on the data flowing from transactions rather than processes, which means a lot of contextual data (e.g. relationship data) is missed.

Then there are the processes. Traditional procurement software solutions have applications and automation solutions for most procurement processes (need identification, spend analysis, sourcing, supplier onboarding, contract negotiation, e-Procurement, etc). But many steps in a procurement process happen outside and between systems rather than within them. This results in more missing data. Orchestration involves capturing everything, including those in-between steps like stakeholder collaboration, ESG reviews, and back-and-forth conversations with suppliers.

Finally, the platform needs to orchestrate stakeholder engagement with procurement. This not only means a unified, improved UX, but automatically enforced compliance with procurement rules leading to a reduction in hand-holding and less maverick spend. Stakeholders across different departments will all have their own peripheral applications and processes outside of your core procurement system through which they complete tasks like budget analysis (Finance) contract review (Legal), or supplier checks (Risk), and these need to be supported and integrated by the orchestration platform as well.

So, the next time a procurement software salesperson tries to impress you with a term like “orchestration”, be sure to ask them exactly what it’s orchestrating, how it does so, and the benefits it will bring.

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