Unlocking the value of procurement in the evolving midmarket

In recent years, midmarket companies have defied emerging risks and disruptions, experiencing remarkable growth. Reports indicate sustained, robust growth among these firms, with technology spending reaching its highest level in this sector since 2019, driven by the acceleration of technology impacting industry at unprecedented levels. One company that exemplifies the transformative power of digital procurement solutions is Cirque du Soleil, a world leader in live entertainment.

For years, Cirque du Soleil functioned with a disconnected array of tools to track and manage spending across departments. This fragmented approach significantly hindered the company’s visibility into employee spending and made policy enforcement difficult, requiring a considerable effort to analyze scattered data and reports. Recognizing the need for unified procurement systems, Cirque du Soleil invested in a digital purchasing platform to streamline processes and increase operational efficiency. By centralizing data, the company has gained real-time insights into spending, supplier relationships, and purchasing patterns. This increased visibility enables Cirque du Soleil to drive more informed decisions and easily communicate results to end-users and suppliers.

Interestingly, the strategic importance of procurement has evolved in today’s business landscape. Small to midsized enterprises now understand that suppliers are essential partners in reaching their business goals. Procurement, once seen mostly as a routine cost-reduction specialist, is increasingly recognized for its central role in fostering collaborative and productive supplier partnerships. For midsized companies, procurement has emerged as a significant asset, serving as a catalyst for process transformation.

Embracing digital technology

Amid this growth, midmarket companies are increasingly prioritizing technology investments aimed at reducing time-to-value and fueling rapid innovation. As the business landscape continues to evolve, procurement leaders must embrace digital technologies to ensure they don’t place themselves at a competitive disadvantage.

There is potential for midmarket companies to lag behind competitors if they hesitate or delay embracing new technologies, including within the procurement function. Companies that do not adopt new technologies can leave themselves vulnerable to potential risk and increasing challenges as they grow. Equipping companies with the right tools and solutions can provide firms with a central view across all spend, offering procurement leaders far greater visibility and control.

As companies move from small to midsized, they often start losing visibility and control over their spending. For smaller companies, there’s less need for established policies, procedures, and oversight around spending; however, as they grow into midsized businesses, procurement operations quickly become essential to business operations. This is why implementing the right approach within a digital solution is crucial, as it allows companies to automate processes, optimize supply chain management, enable data-driven decision-making, and become more strategic about their spending and relationships. For Cirque du Soliel, embarking on this transformation resulted in a remarkable enhancement in visibility and compliance.

Digitalization isn’t a one-size-fits-all solution; rather, it is tailored to address each company’s unique priorities and challenges. Many midmarket companies are increasingly seeking digital transformation strategies to endure uncertainty and disruptions while also driving value and sustaining growth. Embracing digital solutions is not just a choice, but a necessity for building resilience, enhancing efficiency and long-term growth in today’s dynamic business landscape.

Navigating digital transformation

Embarking on a digital transformation journey can feel overwhelming, and knowing where to start can be the hardest step. The best guidance is to start simple and grow more complex as needed. For some midmarket firms, their main priorities still lie in the basics of procurement. These include cost containment, navigating supply chain issues, sourcing, and supplier visibility.

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Additionally, the overall nature of midsized companies brings its own set of challenges—lower cash flow, fewer people, and finer margins. Unlike large enterprises, midmarket businesses may not have the flexibility or cash reserves to weather a large project that doesn’t end up panning out. Equipping companies with the right tools and solutions can provide these firms with a central view across all spend, offering procurement leaders far greater visibility and control.

Spend management technology allows procurement leaders to connect processes and supplier information across the organization. This is especially important as an organization’s network of suppliers continues to grow and diversify. For midsized companies, digital procurement solutions allow them to leverage their data, break down silos, and become more strategic about their spending and supplier relationships. By adopting the right tools and becoming digitally proficient, midmarket companies can meet the high growth benchmarks their organizations have set while also improving margins and becoming more resilient and agile in their processes.

Strategies for success

To ensure procurement tactics align with business goals, midmarket procurement leaders can adopt several procurement strategies to enhance their operations and competitiveness. Cultivating strategic partnerships is essential; this involves establishing mutually beneficial relationships and working closely with key suppliers to ensure quality and reliability. By utilizing each other’s strengths, these partnerships help expand market presence effectively. Next, embracing digital transformation by leveraging technology to streamline procurement operations and enhance efficiency enables midmarket companies to compete on a larger cost scale without compromising cost efficiency.

By implementing digital solutions, Cirque du Soleil has embraced a more agile and efficient approach to procurement, positioning itself for a bright future with long-term growth. With these solutions in place, the live entertainment company can make more proactive, informed procurement decisions, which will help it focus on what it does best – delighting audiences with performances that push the boundaries of the imagination.

Additionally, prioritizing customer experience in procurement decisions not only sets the organization apart in the market, but also nurtures stronger supplier relationships that will scale as the business grows. Finally, fostering a culture of innovation within the procurement team encourages experimentation and strives for continuous improvement. This approach equips leaders with an adaptable workforce that values creativity and is prepared to tackle future challenges head-on.

Adopting these strategies empowers midmarket leaders to proactively address challenges, seize market opportunities, and build a foundation for long-term market success.

Leveraging modern solutions to unlock efficiency and growth

Growing companies often struggle with procurement, but a modern solution can offer strategy, visibility and control. As previously mentioned, Cirque du Soleil recognized the urgency to streamline its procurement processes, such as sending purchase orders directly to suppliers. Given the high degree of complexity with their procurement and sourcing requirements, the company partnered with SAP to migrate these processes to a centralized cloud solution for growth, innovation, and expansion. This transformation enabled Cirque du Soleil to automate manual tasks and lighten administrative loads, while allowing them to recognize the true value of procurement.

Additionally, leveraging digital procurement solutions has transformed spending for employees across the organization by facilitating a frictionless experience to buy on the platform. Orders are automatically directed to a procurement specialist for review, and purchase orders are sent directly to the supplier. The platform has been enthusiastically received because it has made purchasing hassle-free and less time-consuming while also preserving the flexibility to choose among pre-approved vendors.

By implementing digital solutions, Cirque du Soleil has embraced a more agile and efficient approach to procurement, positioning itself for a bright future with long-term growth. With these solutions in place, the live entertainment company can make more proactive, informed procurement decisions, which will help it focus on what it does best – delighting audiences with performances that push the boundaries of the imagination.

About the authors:  

Etosha Thurman is the chief marketing and solutions officer for Intelligent Spend and Business Network for SAP. Stephanie LeRoy is senior director of procurement for Cirque du Soleil Entertainment Group.

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