Digitalisation - Case Studies


 

The importance of stage planning

When it comes to a digitalisation journey, managers must understand the importance of following a staged approach to technological maturity and development. To execute staged planning, firms investigated in the business case phase indicated employing a certain family of technologies, very similar to trends of technology selection uncovered with the survey results. This provides further testimony on the type of technologies procurement can gain benefits from.

When an organisation reaches stage 3, digitalisation can contribute to cost and revenue, once maturity goes forward. As organisations choose and apply digital technologies, they can use these stages to consider their focus – from internal or cost-based efficiency initiatives and service improvements, to business building or revenue-enhancing opportunities.

Ultimately, digitalisation can become a platform for transforming the organisation.

Case studies

The following case studies have been generated following interviews with procurement specialists from three global organisations.

Each organisation has embarked on their own digital transformation journey and are at various stages of development. 

We have created a three stage model for procurement and supply chain specialists to benchmark against when considering digital options for their organisations digital transformation journey, we hope this is especially supportive and beneficial to the profession.

Digitalisation journey

    Case study 1

    Technologies for internal efficiency of procurement and supply

    As many organisations have found, adopting a computer-based approach to its transactions and database brings an unprecedented level of quality, efficiency accuracy and speed to its procurement and supply management function.

    Organisation 1, a UK-based environmental charity and membership organization, has fundamentally improved its expansive procurement portfolio with 150 dynamic projects at any given time through the adoption of technologies and digitized practices. Working with over 20,000 suppliers impacting 7,000 staff and 50,000 volunteers, NT has now transformed its completely analogue procurement processes into a fully digitalized function.

    The initial changes commenced to harness the internal processes and attempt to manage decentralized, diverse and highly customized purchase requests, which required staff spending many hours to structure and execute. By on-boarding a cloud-based, predictive and code-based system of Supplier Relationship Management (SRM) and integrating it to the existing Enterprise Resource Planning (ERP) platform, the organisation has transitioned from spending hours processing a purchase request down to just five minutes.

    Organisation 1, implemented a fully digitalized practice, developing a centralized all-in-one procurement function. This digitally led sourcing process was motivated not to save money but to deliver organization strategies, produce value and direct procurement personnel’s focus on tackling more important issues.

    The organisations cloud-based procurement system acts as a ‘single source of truth’ for supplier selection and sourcing processes with intuitive, analytical abilities to profile suppliers based on their compliance, cost-effectiveness, fit for the purpose, and above all adherence to environmental policies, which is consistent with NT’s values.

    The organisation has obtained a significant degree of efficiency by rolling out a digitalized procurement process consequently enhancing value for money, improving risk management capabilities, delivering on environmental policies and promises, detailing financial benefits and improving compliance. Improved managerial information and control was also achieved.

    Case study 2

    Technologies for holistic business effectiveness

    Organisation 2, is a large and leading technology player that has been changing traditional and manually executed procurement practices into a digitalized, efficient and strategically oriented function. With over 240 procurement personnel dispersed in 30 locations globally providing procurement services to 80,000 internal staff members and customers, managing over 25,000 suppliers, the organisation processes almost 350,000 purchase orders per year.  Procurement did not become revolutionized overnight, but rather took an evolutionary path where improvements were introduced and implemented iteratively.

    The procurement activities within the organisation have been extensively transformed from manual and spreadsheet-based systems, where each and every supplier had to be contacted separately to gather data which then required sense-checking and analysis. This fully digitalized practice now utilizes cloud computing and big data analytics, operating the organisations own tools and platforms such as Azure, PowerBI, Flow and Power Apps to digitally transform the sourcing exercise.

    The procurement team is now equipped with a state-of-the-art supplier relationship management platform sitting inside the developed enterprise resource planning (ERP) system – Microsoft Dynamics – to manage suppliers. This cloud-based system records and stores a wealth of knowledge and information on suppliers and profiles them based on their competencies, qualifications, risk assessment, data privacy, anti-corruption practices, financial health, market-rate and competitiveness.

    These have improved the service that the function delivers internally to other departments, and aligned procurement’s processes, operations and goals to those of other service units, such as contracts and legal divisions of the firm. As a result, internal ‘friction’ has been reduced, and service and customer satisfaction levels have risen substantially. 

    Case study 3

    Strategic transformation through technology disruption

    When an organisation uses technology to drive its market competitiveness or transform its business model, then it has gone much further than stages 1 and 2 above. Australian-based organisation 3 is a good example, having transformed itself from a commercial printing company to become an independent evaluator of a broad range of printed and other products.

    The third organisation in our case studies is a local paper printing company established 45 years ago in Adelaide, Australia, having taken a major turning point as an enterprise by pursuing innovative and technology-based procurement transformations. Organisation 3 has now become a specialized category procurement partner for firms looking for print, campaign, and creative management solutions. Being a first mover and an early adopter of advanced technologies, such as cloud computing, artificial intelligence, and big data analytics, has allowed them to position themselves as one of the pioneering online category management providers.

    The transition from digitized into digitalized business was initiated for the purpose of internal efficiency and capability to manage its suppliers and was mainly motivated by data-driven relationship management with suppliers. This digitalization journey led to the replacement of the previous digitized practices, dispersed data, fragmented communication records with stakeholders, and manual processes. For its leading customers, including large government agencies and Telco’s, enabling them to offer a one stop shop, mandated by these customers for all their procurement. This simplified, innovative and synchronized platform is known as “sourceit” and is a Software as a Service (SaaS) model. “sourceit” provides a highly competitive, affordable, rate-based and real-time data procurement platform allowing buyers to browse a wealth of verified information from pre-approved and qualified suppliers, who are rated according to their compliance, quality and cost.

    The organisation through “sourceit” provides a cloud-based, intuitive and intelligent supplier relationship management environment for buyers to manage the entirety of their supply chain or outsource their procurement practices to the case study organisation. This real-time and instantaneous platform has also paved the way for further cross-functional and cross-departmental automation, such as automatic invoice approval and payment as well as real-time reporting and analytics for executives.

    By finding differentiated services based on new digital technologies, The organisation has transformed its business model from a commoditised printing service to digitally partnering with customers in both public and private sectors, including the State government who now use their services to evaluate suppliers for its whole range of printed materials.

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