Advances in technology offer procurement teams a huge opportunity to increase efficiency and improve decision making. But they create risks, too. Industries are being disrupted and organisations must adapt to retain their competitive edge. The question is: are you ready?
Procurement Leaders helps CPOs and their teams prepare for the changes ahead through insights, applications and connections.
This page presents a selection of Procurement Leaders’ member-only resources, on digitalisation, highlighting examples of best practice and thought leadership from around the procurement community
The Procurement Leaders view on digitalisation
Digitalisation is the number-one priority for CPOs going into 2019 (after cost savings), according to Procurement Leaders’ CPO challenger guide 2019. Yet just 7% of procurement chiefs recognise a digital project as their proudest career achievement. To improve their function’s performance in this area, CPOs must:
Define the outcome they want their digital projects to achieve.
Create a digitalisation action plan. This should be 12-24 months in scope, realistic and outcome-oriented. Do not build a long-term roadmap to a digital panacea
Right-size the data expertise in their teams. Hiring a data scientist alone will not drive your digitalisation strategy.
If we pair design thinking with emerging technologies, we can create a user-centric alternative future for procurement that’s unlike what we have now
Cofounder, Hypereal, and former CPO
Look for creative ways to exploit digital solutions
Cofounder of advisory firm Hypereal and former CPO Cath Thompson argues for a complete digital reinvention of procurement. She writes that the existing blueprint for digitalised purchasing – designed largely with efficiency gains in mind – does not put CPOs in a position to enable the modernisation of their companies. Thompson urges procurement chiefs to:
Look beyond the digitisation of workloads and processes. Although valuable, such changes will not bring about real transformation.
Create user-centred purchasing processes by pairing design thinking with the use of emerging technologies, such as B2B marketplaces.
Let go of many of their core professional beliefs. Competition does not trump collaboration and price is not indicative of value.
Digital collaboration platforms are giving organisations unprecedented access to their suppliers’ innovations. Similar to social networks, these tools facilitate online exchanges between companies and their suppliers, as well as potentially customers and other third parties, and enable all those within the network to collaborate on new products and services. Such platforms deliver the following benefits:
Discover and document supplier innovations in a systematic manner.
Provide organisations with a dedicated channel through which they can collaborate with suppliers and other third parties.
Reduced time-to-market for new products and services.
When Koen Devits took the helm of purchasing at DSM in 2015, the function’s digital capabilities were limited. There were systems in place for spend analytics, SRM, contracting and so on. But procurement’s digital strategy was a disjointed one. In setting out to change that, Devits learned three things:
Break down the corporate barriers to change. Assemble a small team and give them the autonomy to come up with something new.
Think differently. “Hack the design, hack the process [and] hack the mind,” Devits instructed.
Shorten your time-horizon for digital projects. “If we can’t make a concept work [within a matter of] weeks, then we’re not going to go there,” he said.