A recent study conducted by Bain and Company revealed comprehensive insights regarding why digital transformation has begun to accelerate within procurement after a slow start. It seems that many organizations have delayed bringing procurement into the modern era of automation.
A lack of understanding how to fully leverage these technologies pervades executive leadership and often muddies the waters when it comes to accurately measuring ROI. This leads to an avoidance of procurement digitization when allocating IT development resources.
To shed light on how companies can unlock improvements in speed, risk management, and augmented innovation, Bain discusses a few key ways to properly implement digital procurement.
Simple solutions can be executed by finance professionals to streamline workflow processes, reduce resolution times, and even generate error-free reports faster. The article categorizes these benefits as:
- Automated Processes – for reduced time requirements
- Frictionless Collaboration – for informed decisions based on more complete data sets
- Smarter Procurement – for knowing what to buy and who to buy it from
Becoming more efficient in these areas will allow your organization to better identify negative forces and maximize available talent.
Solutions > Products
Business leaders require solutions to problems that occur more rapidly than ever. Simply throwing money at a knowledge gap or supply chain inefficiency doesn’t solve the problem on its own. Agile procurement teams that are in-the-know about innovative technologies are best positioned to provide these solutions.
Maintaining contractual adaptability will also become an obstacle. Moving forward, it is critical for companies to procure legal contracts with built-in flexibility is critical as collaboration increases and newer, burgeoning companies enter the arena.
Procuring a Digital Strategy
Bain lays out a three-step process for making this transition successful.
- Gather Input
- What is the industry landscape?
- What is the current level of your company’s digital capabilities?
- What are the available vendors and solutions?
- Create a Vision
- Look 3-5 years out
- Decide how procurement will operate in tandem with business leaders and vendors
- What technology is needed to accomplish this?
- Design a Roadmap
- Set short- vs. long-term goals
- Identify key investments
- Establish timelines
It has become crucial for procurement teams to join the digital era, as not doing so would force the entire organization into a game of catch-up. Increasingly, driving innovation is becoming the key to remaining competitive.
Read the full article “Digital Procurement: The Benefits go far beyond efficiency” here.