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Today’s data demands can no longer be supported by old enterprise systems. Legacy resource planning systems and electronic data interchanges are cumbersome and expensive, but they are key to nearly all global supply chains. These systems aren’t made to support the type of relational data businesses deal with today to drive decisions.
Looking ahead to the rest of 2018, cutting-edge technologies will play an important role in the procurement function. But new technology brings with it new responsibilities and it’s easy to become lost in the sea of the digital tools available from blockchain to automation to application programming interfaces. It’s important to assess what these tools can actually bring to the organisation. They are most effective when utilised with strategies closely aligned to the values and goals of the wider business. Focusing on a problem and selecting a tool that solves this problem will be vital to its success.
With this in mind, I believe there are three fundamental questions that should frame technology decisions in procurement functions.
Before selecting any tool, organisations must first assess capacity, including the strengths and weaknesses of the procurement process. A careful analysis of today’s state will lay the roadmap for future strategy and success. For example, corporations are increasingly being held accountable for issues around transparency and risk within their supply chains. Thought should be given to what current sustainable and inclusive initiatives are in place in the sourcing process. If the answer is none then it’s time to determine the right starting point. Procuring with purpose will look different to different organisations. Analysing problems first will frame the goal, and ultimately frame technology choices.
Technology revolutionises the way information is distributed. It lowers the barrier to entry for receiving timely, accurate data and gives power to a broader user base, such as business users that might not have technical backgrounds. But in many organisations this data is currently scattered across numerous internal and external silos, making it difficult to use this information accurately. Digital tools can consolidate data repositories and provide centralised, real-time access to this information.
If the answer is ‘not well’, then there is the opportunity to introduce tools with new communication features. Buyers and suppliers have domain expertise in the specific areas they operate in, and so improved communication and collaboration will create a whole greater than the sum of its parts. The growing ability to track multi-tier data has become an important facet of telling an organisation’s procurement story to its various internal and external stakeholders.
By asking these three key questions, procurement and their organisations will be better placed to choose the tools that best fit their business needs.
Daryl Hammett is the COO and co-owner of ConnXus, a SaaS-based global supplier management platform. He previously founded the Peabody Executive Coaching Group and led Luxottica’s Sears Optical North America as senior VP and general manager.
This contributed article has been written by a guest writer at the invitation of Procurement Leaders.