Procurement 'needs board buy-in on digitalisation'
Digitised procurement solutions reduce the burden of manual processing, while fostering closer relationships between suppliers and buyers. This creates better market outcomes and improves overall business performance.
PWC’s 2022 Procurement Survey shows that 82% of digitalised companies succeed with value creation, thanks to procurement data. So, if modernisation leads to greater operational efficiency, why is procurement failing to embrace emerging technologies?
The goal of digitisation is to go paperless, by enabling electronic transactions between suppliers and buyers. Yet legacy systems are preventing procurement professionals from embracing new tools.
This is compounded existing processes not being easily integrated with digital solutions.
Procurement operates within a fragmented supply chain, making it challenging to automate processes across multiple suppliers to achieve a seamless transition.
There’s also complacency within purchasing departments, which too often are focused on cost-savings as the Holy Grail metric for performance measurement, as opposed to building programs focused on total value and revenue contribution.
While limited budgets may make it difficult to justify investment in technology, the true barrier to adoption is lack of management by-in to embrace these solutions.
Stakeholders fail to communicate ROI on digitalisation
Many stakeholders don’t know how to communicate the competitive advantage of digitisation, because they struggle to make a winning business case, resulting in missed opportunities to innovate.
Digitally automating heavily manual procurement functions can more or less eliminate human error and save companies time and resources troubleshooting these issues.
Unlocking real-time spend visibility also enables organisations to track supplier performance and identify new cost savings, while remaining agile to changing market conditions and customer demands. This gives tech adopters a strategic advantage over competitors.
It’s time for procurement to become a central hub of innovation and an integral aspect of a company's growth that can attract the brightest minds in data science, AI, machine learning, and analytics.
The modernisation of marketplaces and search capabilities have made it possible to identify new and alternate supply sources in seconds.
You no longer have to wait two to three years to see the ROI from supply chain digitisation, especially when armed with real-time spend visibility. Departments can work quickly to roll out new technologies, see what fits, and pivot as necessary.
As procure to pay (P2P) automation is increasingly embraced, we will see a positive shift in day-to-day transactions away from manual processing toward strategic data-driven procurement processes that generate real value.
The competitive advantages of digital transformation in procurement will create a larger divide between the old and the new.
Companies can no longer hire their way out of addressing procurement challenges. They need a blend of strong skill sets from qualified professionals across multiple disciplines, armed with the technology to help with the heavy lifting, to make procurement a driver of a company's growth.