According to McKinsey, Chief Procurement Officers (CPO) across leading organizations believe that digital procurement programs would lead to a 40% increase in annual savings on average. However, as more and more organizations shift to digital procurement strategies, the competition will increase. Understand what the business needs are for procurement intelligence and develop anintegrated approach to Big Data analytics;9. 2. This is where digital procurement starts, with a basic switch. 3. Redefining procurement strategy to thrive The COVID-19 pandemic has provided a unique opportunity to gain insight into what the most effective procurement leaders do to respond during times of … A well-oiled and fully-functional digital-forward procurement strategy and operating model will allow executives to: increase spend under management, dramatically improve compliance, accelerate savings and significantly reduce risk. But for newcomers to the digital procurement scene, the … Budget commitment – without a clear digital strategy, it might be difficult to secure the required budget to deliver on objectives. PLUS… Access to our online selection platform for free. Digital procurement is the application of disruptive technologies that enable Strategic Sourcing (S2C) to become predictive, Transactional Procurement (P2P) to become automated, and Supplier Risk … And, a hypothesis is the basis for piloting and eventually adopting digital procurement as an element of an overall procurement strategy; proving a business case. The projected risk of a talent shortage is on the minds of most companies. The strategy will tailor solutions that unleash the full potential of digital. For long, the rise of digital technologies and its positive impact on procurement has been projected as a procurement trend. “84% of procurement … How has adopting a digital procurement strategy streamlined your operations? To implement an effective digital procurement strategy and take full advantage of the opportunities that digital offers, procurement leaders must start by defining the core value that their function brings to the organization. The latest Deloitte study found a clear shift in procurement, with an accelerated pace of change in digital procurement. 4. The most innovative and transformative solutions such as AI, blockchain, and RPA will rise as the next mainstream technologies. With the emergence of digital offering a plethora of new opportunities in procurement, it’s vital that … Digitization is a common theme across many industries. Good Data And Reporting: Since the entire digital procurement management system is data-driven, it needs complete and accurate … … Business intelligence plays a central role in the optimization of operational processes. A well-oiled and fully-functional digital-forward procurement strategy and operating model will allow executives to: increase spend under management, dramatically improve compliance, accelerate savings and significantly reduce risk. Software can help with this, but only if a company has clear goals. However, digitalization requires the precise management of suppliers to stay successful. The term “VUCA” is used to describe markets that are volatile, uncertain, complex and ambiguous. Do you need any other supporting systems or apps to succeed? Will your new strategy require you to re-evaluate your relationships with your suppliers? ProcurementIQ and Bertrand Maltaverne discuss ways to help you create a digital strategy for your procurement department that will benefit you, your stakeholders and suppliers, and your organization overall. It is a manufacturing dream for the ages: the ability … At this stage, you’ve made the switch, and it’s having an impact on operations. It makes sure purchased goods make it safely to the premises. Digital Procurement Strategy & Vision. Get our Procurement Software Requirements Template. Information gathered through these methods can also help stakeholders make educated decisions about future initiatives. CPOs also expect … Four Procurement Processes Every Business Should Automate, How to Get Started With Digital Transformation in Education, 7 Process Improvement Steps to Streamline Your Business, 10 New Hire Orientation Best Practices to Win Over New Hires, The 6 Step Guide to Performing Business Process Analysis, A Step-By-Step Guide to Improving Business Processes. This is where you want to make sure you are getting the right amount of bang for your buck; if you decide to drop the money on automation and are still losing the efficiency game, you may need to go back to the drawing board. Required fields are marked *. We expect that adoption rates will continue to grow and, in many cases, accelerate over the next few years. Research by Procurement Leaders revealed that a fully automated procurement process could save the Global 5000 up to $86 billion a year. Many organizations are considering the implementation of digital tools to optimize their procurement activities. To succeed, a digital procurement strategy is necessary for all procurement experts and must be implemented intelligently. Yet, emerging digital technologies are making a significant difference in savings. Procurement teams need to go through internal processes of implementing digital change, while still streamlining processes to secure the resources and financial wellbeing for the broader organization. One of the best places to look for information on how your digital procurement strategy should form is future trends. With automated procurement processes, everything moves much faster. Elouise Epstein Digital Procurement Futurist & VP Kearney. As the markets recover SpendEdge expects the Corporate Strategy Consulting Services market size to grow by USD 68 billion during the period 2020-2024. The other benefits of a digital procurement strategy were identified as: cost reduction and increasing efficiency (28%), improved procurement intelligence (28%), innovation (27%), corporate social responsibility (20%), improve control (20%), integrated analytics (17%), enable growth (14%), and time-to-market (13%). According to McKinsey, Chief Procurement Officers (CPO) across leading organizations believe that digital procurement programs would lead to a 40% increase in annual savings on average. Many procurement organizations have already started to adopt digital technologies. GEP SOFTWARE™ provides award-winning digital procurement and supply chain platforms that help global enterprises become more agile, resilient, competitive and profitable. Following are a few tips on how using a centralized procurement function … In this scenario, the keys to success will be sufficient talent development to effectively implement strategies, as well as a solution-focused rather than a product-focused approach. As a result, all signs point to a fundamental transformation in the procurement process. Read more: Streamline your Procurement Process | A Complete Guide. One way to do this is through online procurement… It’s no longer a surprise to hear that something has gone digital, whether it’s designed for the consumer market or big business. In the simplest sense, procurement is the management of purchasing and everything involved with acquiring third-party goods and services. 1. As a result, procurement talent is falling behind the technology. Managing supplier relationships is a critical part of the procurement process. Think about the things you need to support your digitalized procurement strategy. 74% say that access to critical talent would be a “high risk” factor in the next few years. Procurement teams need to go through internal processes of implementing digital change, while still streamlining processes to secure the resources and financial wellbeing for the broader organization. Master data management technologies (60%). It’s a vital part of the business for any company that wants to grow fast and stand the test of time. And even less a structured roadmap for action. As per Gartner “Digitalization is the use of digital technologies to change a business model and provide new revenue and value-producing opportunities; it is the process of moving to a digital business.” It deals with the brokering of trade agreements. What problems are you actively trying to solve with adopting digital procurement? It is one of the key drivers towards the reduction of … According to Deloitte, less than half of procurement executives believe that their teams have the skills and capability to deliver on their procurement strategy. According to a recent KPMG survey, “investing in technology and automation” is considered to be the most important means to address the talent shortage in procurement. While purchasing is a very cut and dry practice — it focuses on money spent and goods acquired — procurement is a much broader responsibility. Develop a Digital Procurement Strategy. Depending on what industry you operate in, this could very well describe the commercial landscape at certain points of the year. Digital Procurement 2 Rapid advancements in digital technologies are remaking business supply chains, and are poised to transform how the procurement function delivers value. Procurement leaders and trailblazers can guarantee successful implementation through an effective strategy, but to begin, they … Read the latest interview with Robert Waalder, founder and Managing Partner of @SourcingChampions and Drasko Jelavic, founder and CEO of @Cirtuo, who talk about their new cooperation on a unique and digital AI driven “Category Strategy Development Program“ which supports category strategies … Low-cost computing and data storage have enabled advancements in mobile technology and the cloud, constant connectivity is the norm, and sensors bring devices and machines to life in the Internet of Things. You recognize the value of a digital transformation, but the path to accomplishing such a thing is unclear. The World’s Flagship Event of the Digital Procurement Industry. All rights reserved. DIGITAL PROCUREMENTSTRATEGYHarnessing the procurement … The procurement process has evolved to incorporate more digital technologies. This suggests that they’re not able to make the most of the technology. Complete a training needs analysis and reflect in a learning and development plan;10.Develop a Digital Procurement Strategy and performance manage. DEMO VIRTUAL is open to all startups around the world who fulfill the following requirements: You’ve got to have a tech-related product and no service; You are beyond the ideation … 30. With beautifully rendered interfaces and flexible workflows, GEP provides users fresh, intuitive digital … Complete a training needs analysis and reflect in a learning and development plan;10.Develop a Digital Procurement Strategy and performance manage. This increases operational visibility, reduces the capacity for error and gives customers and suppliers peace of mind. The World’s Flagship Event of the Digital Procurement Industry. Software can help with this, but only if a company has clear goals. The current situation is that most Procurement organizations and CPOs do not have a digital strategy. Take a look at which systems and solutions are seeing an uptick in adoption and what sort of features and tools they bring to the table. 6. Once you have done all of the necessary prep work, it’s time to get your digital strategy moving. Many have had a bad first experience implementing digital solutions. Sensor tracking is a great way to monitor the movement of raw materials and finished products. Mingling with procurement professionals, sourcing experts, category gurus and purchasing managers under the day gave me an incredible insight into daily challenges and pain points regarding their digital procurement strategies. 9. For procurement teams, life is a perpetual push and pull between internal and external forces. Procurement is an essential process for businesses, but few have a full understanding of it. When you’ve identified how your strategy should function, think about what technology you need for it to succeed. In a way, it’s like building a runway before landing a plane — you want to make sure you are prepared before your strategy lands. Eventually, the digitalization of business processes will become ubiquitous, so unacquainted companies will be forced to catch up. Leading organizations that have invested in a digital procurement strategy are seeing high ROI both in terms of costs and efficiency. Procurement is an important tool to deliver government services and maximize value to citizens. For procurement teams, life is a perpetual push and pull between internal and external forces. Geraint John VP Supply Chain Research & Advisory Gartner. The following technologies are worth considering if you’re trying to bring procurement processes into the 21st century: Data and text mining uses algorithms to analyze information. Sit down with your procurement officers and discuss how the procurement process should work in the coming years. A company with $10 billion in revenue could see annual potential savings totaling about $6 million. Implementing a digital procurement strategy should be considered a priority, since it enables organizations to spend more time with suppliers and the strategic part of procurement, rather … While Hackett estimates cost reductions through enhanced procurement digital skills to be around 29%, further research has also proven that 68% global organizations cite outdated technology as a significant pain point for procurement (which further stresses on the need for an overhaul of digitalisation strategies). Good Data And Reporting: Since the entire digital procurement management system is data-driven, it needs complete and accurate data. It looks for ways to secure products at the lowest price. Procurement’s future is increasingly looking like it will resemble an “ecosystem of connected apps” from multiple providers than a solution from a single technology vendor. So with that in mind, here are some key statistics to focus on as we move toward 2020 and beyond. Required fields are marked *. Over the next few years, it will become more imperative to invest in talent development in all areas. They incur 21% lower labor costs and over 10 times the ROI on procurement investments. Digital Procurement is no longer an option but still uncommon. Many organizations are considering the implementation of digital tools to optimize their procurement activities. One way to do this is through online procurement, which provides substantial benefits that shouldn’t be overlooked. Procurement Trend 1- Having a ‘Digital Strategy’ in Place. The biggest impact of digitalization is increased speed. Your email address will not be published. Identify all of these critical factors, and by the time you are done, you should have a clearer vision of how your strategy needs to function when it is complete. 5. Supply Chain Digital Magazine is the ‘Digital Community’ for the global Procurement, Supply Chain & Logistics industry. Firstly, staying up to date on cutting edge trends and terminology is key to staying competitive. If you have taken the necessary steps in the first two portions of this roadmap, this shouldn’t feel like a trial by fire. Governments cannot reasonably hope to have a portfolio of modern technology if procurement cycles continue to take years and deliver products that have begun to become obsolete. Take time to implement a digital procurement strategy as it will enable your company to spend more time with suppliers and the strategic parts of procurement instead of transactions and administrative tasks. Are you trying to increase automation? Naturally, it will be harder to benefit purely from adoption alone. Supply Chain Digital examines McKinsey’s report ‘Driving superior value through digital procurement.’. Haydon: To put it simply, e-procurement is using digital technology and networks to find and purchase goods and services a company needs to produce the products and services it sells. According to Bain & Co., 22 major digital solutions will play a role in procurement going forward. Fast forward to 2019, and things seem to be pointing in a different direction. The Golden Match for Digital Procurement Strategy Creation. In fact, it’s often used interchangeably with purchasing or sourcing, despite the three occupying different roles. Let us know with a comment below. Your email address will not be published. Project managers would need to make their own arrangements, and this opens the door for errors, losses and delays. How is procurement going to function in the next five years and how does your digital procurement strategy fit in? Save my name, email, and website in this browser for the next time I comment. Digital supply chain and supplier management. Create a timeline to ensure that you are hitting a satisfactory ROI for your new digital procurement strategy. Set achievable goals in the near future as these can help build up some forward momentum. While Hackett estimates cost reductions through enhanced procurement digital skills to be around 29%, further research has also proven that 68% global organizations cite outdated technology as a … Explore every avenue you can, find out how trends are shaping the market, vendors, procurement experts and your own company before heading to the drawing board. VP Digital Procurement Strategy Schneider Electric. A comprehensive strategy to both adopt new technologies, as well as train talent for the necessary skills, will become increasingly important over the next few years. Luckily, we just so happen to be talking about that next. For others, the return on investment (ROI) isn’t clear, or the executive team doesn’t understand why procurement should be a strategic priority for information technology investments. Learn About This Essential Business Process. Technology will have an increasing impact on the procurement process. Category strategy work-flow portal. Your email address will not be published. 8. Strategic Priorities for the Procurement Organization… It’s important to remember that digitization is not an end in and of itself. Without a dedicated department for acquiring goods, operations would stall. 7. GEP SOFTWARE™ provides award-winning digital procurement and supply chain platforms that help global enterprises become more agile, resilient, competitive and profitable. In order to realize the full potential of the digital revolution, procurement teams must restructure t… Digitalization refers to the use of active digital procurement processes. Your email address will not be published. Jump-start your selection project with a free, pre-built, customizable Procurement Tools requirements template. Digitization refers to the conversion of analog processes into digital ones. Purchase Orders vs Purchase Requisitions – How Are They Different? Cost reduction has always been a big part of procurement management. So, it should be clear why procurement is so important. The Golden Match for Digital Procurement Strategy Creation. It’s easy to look inward and decide what you want, but in the end, what matters is how your digital procurement strategy works in the business world, not just in your offices. It’s necessary to meticulously monitor the value chain across all tiers in order to maintain a competitive position. In fact, when developing digital skills in procurement, 86% of UK businesses claimed they had faced barriers. In 2018, the Province launched the British Columbia Procurement Strategy, which committed to making it easier for companies to do business with government and creating more opportunities for organizations of all sizes. During the interview, Stephane Sacherer explains that the vision at Mondelez is built upon putting the buyer and the supplier at … With digital procurement, bots will automate and streamline manual, routine procurement tasks; buying agents and advisors will help people make the best purchasing decisions, delivering optimal value to the business. Rather, it’s a way of generating a measurable benefit for procurement teams. The Hackett Group identified 6 types of mainstream technologies currently used in procurement. Typically, this backbone provides all data used for deeper analysis and hosts the main process and data stream of the … Understand what the business needs are for procurement intelligence and develop anintegrated approach to Big Data analytics;9. This, in turn, transforms how buyers interact with suppliers and other third parties by serving as a platform for new levels and types of collaboration. Having a ‘Digital Strategy’ in Place. © 2020 SelectHub. When asked about their level of technological skills, most respondents rated their companies as “average-to-weak”. If you’re sold on embracing the digital lifestyle, you may be wondering how to begin the process. The digital revolution continues to impact all aspects of the business. Procurement leaders and trailblazers can guarantee successful implementation through an effective strategy, but to begin, they must first identify the core values within an organisation that can be disrupted by emerging technologies. read about the digital procurement revolution HIGH VELOCITY, START TO FINISH The only partner that can provide digital procurement transformation end-to-end through the entire source-to-pay process for your financial institution, Accenture offers the ability to identify the source of savings, build the change program and execute it all—the total package. This investment allows procurement teams to possess the skills and ability to deliver future strategies. “Digital Procurement Hero” (DPH) is a brand name operating under the legal entity “Baetens Consultancy” (CR 0732595567) with its registered office located in Belgium, Weynesbaan 186, B-2580 Putte. What is Digital Procurement? 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