The time to digitally transform Procurement is now!

COVID-19 has disrupted industries of all kind in their permanency and supply chain operations.  Many...

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Posted by Dave Food on Jul 1, 2020 5:21:22 PM
Dave Food

COVID-19 has disrupted industries of all kind in their permanency and supply chain operations.  Many have to act without hesitation to accelerate and adjust their transformation to implement the latest safety measures and take the necessary steps to let employees work remotely where possible.  It will be worth the effort.

The pandemic has revealed severe concerns for many businesses, as the lack of skill on the use of innovative digital technology to act on the crisis, particularly evident in the Procurement staff.

The role of Procurement is gradually becoming more important; Procurement is good for dealing with this current crisis.  However, the gap on digitisation is restraining Procurement teams to go further.  Recent studies showed that Procurement and supplier management performs as less digitally mature than other divisions.

Procurement, Supply Chain and Finance professionals are virtually employing most of their time struggling with unproductive-manual Procurement processes or paperwork, like invoicing; it blocks units from focusing on more strategic actions, reducing valuable time spent on supply chains.

This situation causes an increase on the operation cost by millions, limiting the capability of Procurement units to bring more strategic value, whilst 60 % or so of companies declared they were even now dependent on those processes as part of their Procurement or supplier management responsibilities.  Lack of digitisation hold Procurement teams back.

There is much more to do when trying to create a competitive advantage to unlock the strategy value Procurement has; investment in edge-digital technology will make Procurement brighter and more adaptable, vital to drive in today's competitive global markets. Complete digital transformation remains a long way off for most Procurement and supply chain organisations.

Some of the impacts caused by lack of digitisation 

  • This gap is obstructing its capability to lessen the impact of COVID-19 on the business supply chain.
  • Without digitisation Procurement teams make a great effort to check what is going on with suppliers, leaving them vulnerable.
  • Make it difficult for teams to make effective decisions, handle suppliers and face the effects on the business.
  • The shortage of digital technology and skills is blocking its effectiveness.

Organisations that are digitally mature will quickly adapt to this new normal.  As a result, we now understand that COVID-19 is a channel for digitally renovating Procurement. Organisations believe that greater digitalisation and better digital skills will support them to soften the impact of COVID-19 on the business more effectively. 

Lack of visibility into the supply chain could have significant consequences for businesses, putting companies at risk of non-compliance of government regulations linked to trade and travel changes reacting to the pandemic.

Companies require real-long-term permanent transformation and investing in long-term Procurement digitisation to allow companies view what is going on in the supply chain in near real-time, making knowledgeable decisions about how to alleviate the consequences of the COVID-19 on the supply chain.

This transformation supports the company to adjust to current circumstances, giving remote workers the means to be more constructive, boosting supply chain visibility, and enhancing better collaboration with suppliers.

It will provide Procurement teams with the chances to add value to the business, work with suppliers to pinpoint new spaces to transform, and for C-suite to take the risk on supply chain and environmental impact.

Moreover, digitisation will boost productivity at a time where organisations have to be as agile as possible. For employees, this digitisation means there is more time to spend planning, contributing to business-critical tasks and maintaining excellent communication with wide-ranging companies.

CONCLUSIONS: those that do not take the necessary steps to permanently transform Procurement take the chance of being left behind by competitors and exposed to worldwide events.  Is your Procurement staff ready to accelerate this digital transformation?

Dave Food

Prophetic Technology

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