Digitalization creates two new opportunities for any Procurement function. First to step-up and support the corporate digitalization roadmap and taking clear ownership of supplier relation that support this transformation. Secondly it creates opportunity for the Procurement function to drive Procurement Digitalization that can be used as an enabler, to identify and create value, and to prevent value leakage. A Procurement Done Right function needs to embrace these two opportunities.
Sourcing Contributing to the Move to Digital
Most mature organizations across industry sectors have already or are about to embark on Digital transformation journeys which will be critical for their success and survival long term.
Procurement functions can play a vital role in this, but in most cases, this means they have to adapt and transform fast themselves as well, in order to meet challenges such as: integrating towards product-oriented organizations and agile delivery models, dealing with increasing complexity and pace of change, adapting to new goals and business strategies, move from cost to value focus, develop and maintain new types of sourcing models, contracts and relationships, change the way they look at business risk etc.
Procurements Own Digitalization
In additions to this there has been countless of discussions about; why is it so complex and time consuming to buy corporate stuff when it is so easy to buy something online as a private person. For the last 20-years this has been true, but now times are changing fast. Now Procurement faces a wake-up call that can change the function totally, moving lightning fast towards full automation.
As Procurement moves from user-unfriendly suites to user centric best-of-breed applications. From bespoke processes to standard workflow. From on-prem solutions to SaaS solutions. There is a tectonic shift ongoing for the Procurement function. An explosion of Procurement technology start-ups has emerged with unique offerings and user-friendly solutions. Offering a wide range of micro-services that can be integrated to change the Procurement function for ever.