The traditional procurement operating model is undergoing a lot of changes lately. There is a need to shift from the current scheme, and implement innovation to create work efficiency as well as an effective cost system. A lot of companies are currently investing into technology driven solutions so as to minimize corporate risks, reduce costs as well as implementing a faster process and bringing positive contributions in a business.
All in all, the Procurement industry wants to achieve improvement by investing in the right technologies which could lead to a drastic cut in expenses and enhance efficiency at work. Could companies which do not invest in technology driven solutions fall behind in the coming years? Such is the pressing question in times of extreme shift from traditional methods to a digitized era. Are we ready to embrace a technological culture or could this be a cultural shock for those who lack talent in digital innovation? Let us peep into the future of procurement.
Procurement and Digital innovation
Procurement will continue to act as a catalyst in shaping companies’ overall business. The kind of change companies are facing right now shows that innovation and evolution in procurement are still challenged by capacity and capability constraints. The reason for this is that various organizations have shown that procurement will be digitized in the coming years.
“65% of Chief Procurement Officers surveyed believe analytics will have most impact on procurement over the next two years.”
Procurement & Information systems in previous times:
In previous times, an information system helped procurement in a very basic way. It supported the information phase only, that is, storing basic information or creation of elementary documents. However, now Information systems are far more interactive and customizable.
How can digital innovation help procurement?
- Enhance Stakeholder experience
- Building procurement as a service portfolio
- Speed up transformation with technology
- Provide better corporate insights with Analytics and Data
The need for rapid, sustained and effective Procurement process
Ask any company why they need to shift to digital innovation, amongst all the vital points they elaborate on, the bottom line always revolves around reducing costs. An improved and automated system will definitely help to cut on unnecessary costs such as; less workforce, capitalizing on time with a faster process, and omit excess of third parties between procurement and supply chain. Procurement is not restricted to only sending out catalogues and negotiating a price, but it now has to deal with global suppliers. By so doing, procurement managers also have to take into consideration if products and services provided are sustainable. Additionally, they have to manage digital channels that connect the company to suppliers and customers.
According to Deloitte Global Chief Procurement Officer Survey 2017, the following chart depicts what kind of importance is being given to digital innovation in procurement.
The Robotic Process Automation (RPA): The Digital Workforce
What will revolutionize our way of work tomorrow? The digital workforce will shape the way we work. In the future, most procurement teams will have digital employees next to them. A digital workforce is a software which automates the patterns of how humans use computers in rule-based tasks. Just like any other employee, a digital employee will be trained to carry out the same tasks, but in a faster way and omitting as many mistakes as possible. Therefore, the responsibility of repetitive tasks carried on a daily basis will be laid on the powerful ‘shoulders’ of a digital employee. Companies possibly tend to overlook the time spent in daily routines and this ultimately blocks many employees’ growth. Being confined to doing the same thing over and over again, will obviously result into no time for enhancing activities. In replacing these tasks, RPA allows procurement professionals time to improve their focus and efficiency.
The Bottom line:
The whole purpose of getting procurement and digital innovation together is to integrate both in a sure system. This system will generate more incentives to create a better workplace and ease the whole process of procurement. At the same time, the Supply Chain procedure will also bear the positive consequences. A cost effective and efficient work plan will only bring positive contributions to any procurement organization. To those who are still lagging behind in this process, this is a call of the future! It’s high time to find new ways to start generating productivity with the most sustainable methods.