If information is power, then procurement occupies the throne, sitting as it does at the confluence of huge streams of data that flow between the company and its partners and stakeholders. Having access to all this information, however, is not the same thing as understanding it. If organisations want to make full use of the massive amounts of data modern entities deal with every day, they have to embrace digitisation.
What is digital transformation?
Digital transformation is simply the embrace of advanced digital systems, such as AI and machine learning, to enhance and revolutionise how an organisation conducts business. For procurement, digitisation is the key to realising its potential above and beyond bottom-line concerns. Companies and agencies are looking to their procurement teams to identify not only cost saving opportunities, but to enhance supply chain visibility and increase resilience, as well as improving communication between stakeholders and suppliers, and crafting collaborative and inclusive remote-working systems.
Not too much to ask, is it?
With the correct implementation of advanced digital systems – and appropriate workforce training – there’s no reason procurement teams can’t deliver on these expectations. Considering the rapid uptake of digitisation across industries, it’s a case of evolve or die.
How digitisation can transform procurement
A significant majority of procurement leaders have identified digital and analytic solutions to be the key driver in the future of procurement’s effectiveness, according to a McKinsey survey. Why is this common belief?
Now and increasingly in the future, fewer personnel will be expected to do more within procurement teams. Reduce the time spent on each task while improving the outcome by adopting advanced analytics that present data in an easily consumable layout and make the opportunities for innovation and cost-saving noticeable. This also allows buyers to focus their attention on higher value tasks.
Supply chain resilience is a massive concern for every organisation operating today. Disruptions are occurring more frequently and lasting longer, due to globalisation, pandemic-like events and global warming. Prevention is your best defence. There is software available today that can be customised to scour the internet for particular terms, forecasting potential disruptions and providing time to act.
For instance, searching for terms such as union, strikes and the name of a port a supplier uses will give you notice of any ructions bubbling away that could lead to the closure of a crucial piece of infrastructure that supplier uses. Getting wind of disruptions before they occur provides time to seek alternate suppliers.
The effectiveness of procurement is directly linked to the quality of the data at its disposal. Advanced software that utilises AI and machine learning can break down information silos and collate unnecessarily segmented streams of information. This is the best way to give an accurate picture of where money is being spent and – more importantly – where it is being wasted.
How to begin the digitisation process
Adopt the latest in AI and machine learning
To deliver on what organisations expect of their procurement teams, the latest in AI and machine learning needs to be adopted. Purchasing Index offers cutting-edge and bespoke platforms that can transform your procurement function in three stages:
- Collect datasets from suppliers, customers and employees.
- Transform that data into meaningful information and – importantly – benchmark it.
- Empower you to step back, see the big picture and make effective, transformative decisions.
Software such as PI’s ProcureTrak brings visibility to supply chains that has previously been inaccessible. An organisation will understand how they’re performing compared to competitors, the categories in which they are achieving savings and the opportunities to be seized.
Make your staff digitally literate
If adopting the latest software is the logical first step in procurement digitisation, then training your staff to use and understand it is the second. AI and machine learning is a rapidly evolving sector, and a lot of it isn’t necessarily intuitive to use. Surveys have revealed that 83% of procurement officers believe that better digital skills would have helped them navigate COVID-19 more effectively, and 84% believe that digital skills are now more sought after than procurement-first skills.
Academy of Procurement offers the training your staff will need if they’re to make full use of what advanced software has to offer. This is not about embracing the future; it’s about embracing what’s happening right now. Digitisation is here and those who adopt it early will grab the opportunities that are invisible to those who hesitate.