3 steps to reap the benefits of digital procurement
- Any company can achieve the benefits of digitized procurement if they follow three steps and focus on five factors outlined by Accenture Operations in a recent report.
- First, companies must record why decisions are made when processing transactions. Then, they must record transactions with new, digital technologies. Once steps one and two are done, companies must look outside their own "data ecosystem" to guide "business decisions" as opposed to just transactions.
- The process may seem simple, but it focuses on building an intelligent procurement process. To do this, professionals must also ensure they focus on developing a company's data capacity, technology toolbox, standard policies and procedures, digital user experience and, finally, their labor force's talent.
I bought a car last week the old fashioned way. I walked into the showroom of my long-term dealer, told the owner what I was looking for, had him check out my trade, chatted a bit about business and the weather, and went home. An hour later he called with a trade in value and my options on a purchase. I agreed to the deal over the phone and stopped into the dealer later in the day to sign the paperwork. Picked up my new ride two days later ... and with a full tank of gas mind you.
Yet the process for this old school single brand dealer was fueled by technology. They network with other regional dealers to combine inventories, reducing financial exposure and maximizing a broader range of alternatives. Much like retailers, they pull stock and ship from the optimum store or distribution center. Cars are essentially a retail sell and I’ll take a greater selection any day. Approval on the web based financing was instantaneous as was the link to the motor vehicle bureau for my registration. A half a dozen clicks and all of the paperwork was spit out for signature.
The more I thought about it, it was very much a function of the best of digital procurement. I was able to maintain my personal relationship with the dealer, important to me. Yet, the inventory search and the paperwork was digital and quite easy. The delivery of the actual vehicle was done by humans … not a robot to be found.
Digital procurement is really making inroads in subtle ways in pretty much everything we do.
Supply Chain Dive
There was a brief wait as the plates were switched and the car was getting its new inspection sticker. One of the salesman lamented the Internet was killing sales for him. Far too many customers were surfing the web at different dealers and going directly to them. Others were using apps to find the right car.
He also lamented about inventory. There were fewer cars to sell on the lot. What was a financial benefit for the owner was hurting his sales. He felt at a disadvantage to the mega dealers who had greater stock on hand. He said his book of business was a repeat customer like myself. He seemed to be doing fine, "but not like the old days."
The service manager then chimed in. He was at a car show last year and saw the concept of a ‘service kiosk’, where customers typed in their issues and put their key in a secure drawer. He lamented that while that may be efficient, he questioned who was going to answer the telephone and speak with a customer about a warning light.
Sadly, and to his point, Google seems to be the default service manager in my life for pretty much anything.
We tend to look at digital procurement under the lens a high volume-manufacturing environment, and the benefits of increased efficiency, reduced costs, and analytics are clear. And, I’m not sure the procurement organization has really been left behind. But digital procurement is really making inroads in subtle ways in pretty much everything we do. We need to expand the enterprise definition with one a bit more inclusive. If we were paying attention, we’d say that digital procurement is all around us, just in different ways.
Revealingly, my first post delivery order was for a bottle of precautionary touch-up paint. Amazon Prime will have to my home in two days. Free.
- Accenture Next Generation Digital Procurement