Subscribe to the blog

Get the latest Procurement insights from our experts

Procurement in the digitalisation age

by | April 25, 2018

In simple terms digital procurement is a combination of tools and processes combined with technology that altogether enable digital procurement across the procurement landscape.

The past ten years have seen huge changes to the way businesses serve customers, market their offerings and enhance their supply chains. Digital transformation has brought unprecedented levels of efficiency, service personalization and process automation.

Most companies have already in place some form of digital technology. Most organisations deploy several forms of core procurement technologies. These platforms usually include a combination of spend analytics, eSourcing, contract management, and eProcurement (eCatalogs, eInvoicing), among others.

What are the challenges for companies?

  1. Cost – no budget – Business case difficult to justify expenditure
  2. Time – overall timeline takes years, not months  – Requires significant people investment
  3. Experience – procurement function focused on sourcing  –  change management not a resident skill
  4. Readiness – no centralised resource across the Source to Pay process

Benefits of using digital technology

  • Tracking and reporting financial savings achieved through procurement initiatives across your organisation
  • Reduce your procurement cost of function – use digital technology minimising manual related tasks, allowing your buyer to focus on the value-added activities
  • Introducing higher levels of data integration and AI into Supplier Spend Analytics
  • Digitise and Optimise your Contract Management, Renewal and Reporting
  • Enhance Supplier Management processes
  • Efficiency in ongoing production of category plans through automation and data modelling
  • Reduce your transaction costs across the whole Source to Pay
  • Enhance negotiation methods achieving a step change in savings
  • Identify and reduce contract leakage

Journey towards enablement of Digitisation

Recommendation for beginning your digital transformation journey

  • Review your current Procurement target operating model and put digital procurement at its heart.
  • Examine your all procurement processes in conjunction with your current system platform and prioritise the non-systems activity
  • Look at the holistic procurement process, not just the transactional
  • Take a look at your procurement cost of function, identify how automation can reduce the manual administration tasks
  • Drive towards a single data module for Procurement, consolidating Sourcing, Contract, Spend and external data into a usable model

Procurement organisations are continuing to invest in mainstream technologies that make the transition to digital business possible. They plan to further increase their transfer of data to the cloud over the next two to three years.

Procurement must look to make the most out of its budget, expand its role, and adjust its philosophy to suit a world of shifting norms and evolving technology.

Read here how companies can deliver more effective procurement through digitisation! Get in touch and give us the chance to create together a world-class procurement function!