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Procurement's revolution will be digitalised

Data & AnalyticsEmerging TechnologiesFunctional Strategy & Planningprocurement technologyStrategy & Org DesignStrategy Development+-
Digitalisation and procurement

After cost savings, respondents to Procurement Leaders’ CPO challenger guide survey identified digitalisation as their number one strategic priority for 2019 while 72% of digital procurement leaders who attended the Data Intelligence and Technology forum this November say they are at the early stages of their digitalisation journey, marking a pivotal moment in the evolution of the function.

 

Procurement has a unique vantage point – a 360-degree view of the entire value chain: the customer, the business and the supply chain. Procurement chiefs have the opportunity to be the connection that allows collaboration in the value chain, enabling parties within it to learn from each other and build better products, experiences and engagement.

 

Improving the function’s digital literacy will allow procurement executives to systemise and scale these efforts and turn your behaviours, your skills, your talent into new digitalised business processes. Once digitalised, procurement teams’ supplier relationship management programmes, for instance, will no longer focus only on the largest suppliers, but the entire supplier ecosystem.

 

That’s the crux of digitalisation. It’s not about buying a tool or a piece of software; rather, it represents an opportunity to drive business value by using digitised assets to enable business process transformation. For example, using enterprise resource planning systems and e-sourcing to enable a digitalised collaborative ecosystem of suppliers – to crowd-solve and crowd-create new intellectual property.

 

While 61% of digital procurement experts told us they were in charge of the digitalisation strategy, 39% of respondents are being led by someone else. Procurement executives cannot afford to take a backseat during this digital revolution, they must take control by focusing on outcomes.

 

Focus on the right outcomes

One-third of digital procurement experts said they expect “data transparency” to be the main outcome of digitalisation projects in 2019. But they are not focusing on the right outcomes. Data transparency is not an outcome; it’s an enabler, a step on the journey. If data transparency is on your priority list, the question to ask is: what are you going to do with your clean data? The answer to that question is the outcome on which you should focus.

  • Will your outcome be a procurement benefit, such as identifying areas of inefficiency to automate with robotic process automation?
  • Will it be a business benefit, such as ensuring supplier diversity?

Taking control of digitalisation is not about being distracted by building a five-year roadmap to a digital panacea, it’s about planning what outcome you can deliver in the next 12 or 24 months. By focusing on the outcome, you will drive focus on results. This, in turn, will help procurement prove return on investment and demonstrate its value to the business.

 

Procurement Leaders is the partner of choice for more than 750 companies across membership and events. Contact us to find out more about joining the community and getting ahead of your competition.

 

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

 

Errol Rasit
Posted by Errol Rasit

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