Procurement must go digital to keep up with the pack
- More and more, digitization is becoming an anchor for growth strategies and procurement is no exception, Supply Chain Digest reports.
- Yet, a recent survey by IT service management consultants The Hackett Group reveals procurement budgets are expected to rise just 1% this year, placing a strain on innovation.
- As a result, the group identified four lower-cost digitization priorities procurement professionals can pursue: speeding the purchase to pay process; reducing regulatory non-compliance; improving organizational agility and supporting enterprise-wide digital goals.
The digitalization of the supply chain has shifted from a focus on lowering costs while maintaining quality and service to a focus on increasing sales. As globalization takes hold, the supply chain has turned to data, the cloud and connected technology for the same purpose: expansion.
Procurement is particularly poised to benefit from digitization, given its transaction and process-based nature. While operations depends highly on shop floor productivity, and logistics must manage multiple actors and variables in the chain, procurement's role requires a greater emphasis on soft-skills like relationship management.
The focus on soft skills does not mean hard benefits cannot come out of digitization, however. Waste is pervasive throughout any organization, and wasted time is among the most common inefficiencies. Digital tools, from chatbots to customer relationship management (CRM) systems or cloud-based compliance forms, can help cut back time spent on rote tasks and boost worker productivity.
That's why the Hackett Group's recommendations for easy procurement fixes focus on optimizing processes. A better process means happier suppliers and workers alike, and can open the door for further revenue streams. Once the first step to digitization is unlocked, it may open the door for procurement to innovate in other ways; but one step at a time.
- Supply Chain Digest Hackett Group Identifies Four Key Ways Procurement can Get in the Digital
- Supply Chain Dive How digitization changed the nature of supply chain management
- The Hackett Group The CPO Agenda: Keeping Pace with Enterprise Digital Transformation