How is Digital Transformation affecting the Procurement?

digitalFor business entrepreneur’s, the previous couple of years have been ruled by the topic of digital transformation. Just by analyzing the trend these days, you can surely say one thing, if you fail to incorporate transformational digital technology and processes into your enterprise, you are probably going to rapidly lose your valuable market share. We’ve subsequently observed some of the rapid technological modernization happened over years, where everything from customer service to marketing and sales has been reworked to suit with the digital age.

With this change in digitalization, many organization has shifted their focus towards modernizing, but there’s been one business section that has been missing from such procedures, and that is Procurement. It is a known fact that organizations have kept on putting resources into discrete procurement solutions, like the cloud-based tools or eProcurement systems, but this change has been insignificant. What’s been missing is the complete shift to a result based, data-driven approach that characterizes genuine digital transformation. Due to this, many procurement teams are just putting a thin layer of digital technology over existing conventional procedures; look beneath the cover and you’ll find the very old procurement processes.

Undergoing a transformation in procurement requires a lot of things to reconsider, as it will affect the needs and functions of your business. You will have to change the whole topology of your business to notice the change, such as data analytics, smart interfaces and artificial intelligence, to enable the function as experience driven and easily understandable for users.

In a genuine digital enterprise, procurement is an essential part of the control and competitive differentiation. It helps to lower the cost through the automation of redundant tasks, delivers AI-powered, real-time insights to enable the business to settle on better choices, and, at last, enhance worker encounter.

There are five key factors that must be considered carefully for a procurement team starting out on a digital transformation journey.

  1. Data: Teams must ensure they source information from as wide a pool as could be allowed, both inside and outside the organization. It is pivotal to ask the right questions on and about the data. For instance, don’t go for what was purchased and at what price, but give more importance to why it was purchased.
  2. Technology: It is vital to employ the best suited technology that can understand the data and draw out key insights in to an organization the business can follow up on. This includes Artificial Intelligence (AI), analytics, normal language preparing and bots.
  3. Client encounter: Create new and intuitive tools that will help both the procurement team and users of the eProcurement service to use. The more interactive and user friendly the experience is, the higher the take-up will be.
  4. Ability: Form a multi-functional group containing data scientists, AI experts, classification specialists and IT and design professionals. Genuine digital transformation requires a special set of skills and the race has already started for enterprises to secure the talent they require.
  5. Strategies and systems: Finally, it is important to ensure all procurement techniques are outcome based. Lead a full survey of procurement strategies, methods and working models, and after that guarantee everybody comprehends their new responsibilities.

The digital transformation of the procurement process in an enterprise will take quite a while to complete, as it takes time for the organization to collect data, and set up the essential systems and procedures. The race is on: if you need to have an effective procurement system that increases the value of the business, you should act now.

If you have any questions regarding procurement management services, you’re welcome to ask our team.

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