For business leaders, the past few years have been dominated by the topic of digital transformation. The message is now known to all: if you fail to integrate transformational digital technology and processes into your organisation, you are likely to quickly lose market share. We’ve therefore seen a period of rapid technological modernisation, where everything from customer service to sales and marketing, and logistics have been redesigned for the digital age.
However, as businesses have set about modernising, there’s been one business function notable by its absence from the process: procurement. Sure, businesses have continued to invest in discreet procurement solutions, such as cloud-based tools or eProcurement systems, but this change has been minimal. What’s been missing is the wholesale shift to an outcomes-based, data-driven approach that characterises true digital transformation. As a result, many procurement teams are simply putting a thin layer of digital technology on top of existing processes; look below the surface and you’ll find the same old analogue procurement processes there.
Undergoing a procurement transformation requires a root-and-branch rethink of what the function can do for the business. At the heart of this change will be the ‘Amazon-isation’ of procurement: the use of data analytics, artificial intelligence (AI) and smart user interfaces to make the function as insights-driven and user-friendly for stakeholders as Amazon is for consumers.
In a true digital enterprise, procurementis an important lever for control and competitive differentiation. It enables cost-efficiencies through the automation of repetitive tasks, delivers AI-enabled, real-time insights to help the business make better decisions, and, ultimately, improve employee experience.
For procurement teams starting out on a digital transformation journey, there are five key factors that must come into play:
The digital transformation of procurement will take several years to complete, as it takes time for organisations to collect the right data, and put in place the requisite systems and processes. The race is on: if you want to ensure you have an efficient procurement function that adds value to the business, you must act now.
Kristin Ruehle leads the Procurement Business Process Services (BPS) offering globally for Accenture Operations
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This contributed article has been written by a guest writer at the invitation of Procurement Leaders. Procurement Leaders received no payment directly connected with the publishing of this content.