Evolving procurement’s business case for digitalisation

Digital leaders discussed ways procurement teams can gain support for their projects

This year’s Data, Intelligence and Technology Forum was a great opportunity for digitalisation leaders to share their successes and pain points with their peers. Presenters, panellists and roundtable participants shared a lot of insightful stories.

 

I had the pleasure of moderating a panel that explored the explored ways procurement teams can build business cases that capture budget holders’ attention – a topic that is ever-more pressing in the face of increasing competition between business units. I was joined by Steve Carter (Ivalua), Lene Aabo (Novozymes), You Hua Tong Strömberg (Tetra Pak) and Rob Alexander (JLL).

 

Summarising our discussion into one sentence hardly seems possible but I’ll try nonetheless: make your problem your boss’s problem. Too often, procurement teams get stuck with their projects because they’re unable to communicate the benefits any investment in procurement technology will deliver beyond the function. This is about ensuring the digitalisation initiative adds business value, not just procurement value.

 

Every CEO is worried about being caught up crises stemming from ethical or sustainable wrongdoing, so risk management is a good example of a technology use case that may enable procurement teams to secure the investment they need. The task for the team is in this instance is to demonstrate how it could harness such a tool to manage a broad range of reputational and supply chain risks in real time to help safeguard the business.

 

Some of the other insights our panellists shared include:

  • Don’t be obsessed with an immediate 15:1 return on investment. Rather, think of the consequences of not implementing a system to address an issue. Digitalisation is no longer a matter of competitive advantage – it’s about survival.
  • When asking for budget, decision-makers will need to know the outcome and what the function wants to achieve. Define and communicate the milestones to showcase your commitment and preparedness. Involve suppliers at an early stage.
  • To understand stakeholder needs, use data analytics to show what is missing today and what value you will add. Transparency is a speedy way to get budget approval.

Thanks to our great panellists for a lively discussion and for sharing their knowledge with the audience. DIT will be back next year, and technology is going to be a key topic at other Procurement Leaders events next year.

 

This article is a piece of independent writing by a member of Procurement Leaders’ content team.

Niko Nurmi
Posted by Niko Nurmi

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