Investment in digitalising procurement and supply chains has never been so important
The pandemic has forced many people’s hands in implementing digital solutions or fast-tracking those already in the pipeline. Knowing where to invest time and money for maximum return on investment can be difficult to balance. Whatever your corporate goals might be, a digital platform is critical to making more informed decisions in many areas. Where should procurement focus our efforts?
1. Data management: vital procurement analytics only work if your data is accurate and up-to-date. Before you embark on big data projects, first look at how clean your data is and establish a single source of truth, particularly when moving away from legacy systems and combining data sets. It can be an enormous task, but reliable and credible data is essential to extract value from your digital investment.
2. Automation: the quick wins for procurement must create efficiencies in transactions, from sourcing through to payment. Technology for digital supplier portals, online auctions and the like have advanced significantly. AI and machine-learning have tools such as these to maximise their use and reduce human intervention even further. Seek out the laborious tasks in your team and see how they can be automated to release resources for more strategic work.
3. Supplier management: the physical distance between buyers and suppliers has provided some procurement teams with challenges over the past two years. For some, transacting more regularly and remotely will become business as usual, and it’s possible to digitalise more than the obvious transactional aspects of managing suppliers. Long-term capacity planning, performance management, quality control and providing a platform for exchanging innovative ideas can all be better enabled through digital platforms.
4. Risk management: this has been critical during the pandemic. Platforms that draw on data from multiple sources to build an informed picture of the risks in your supply chain are crucial for navigating turbulent times. It’s essential to work with suppliers to understand the trigger points and wider intelligence data feeds that might inform a risk before it happens. This is more about transparency and mitigating risks than it is about driving a competitive advantage. Greater collaboration is key.
5. Sustainability: insights into how your supply chain is performing against sustainability targets and identification of areas for improvement will be key for procurement professionals who are serious about addressing sustainability in supply chains. It’s estimated that Scope 3 emissions account for around 90% of a company’s carbon footprint and reporting on this is on the up, whether that’s for the board, for investors or to remain compliant with legislation.
Digital solutions provide the insights for procurement teams and the board to make better decisions and even to inform strategic direction. If you are standing still in this space then you are already falling behind as technology is innovating at lightning speed.
And not all of it comes at great expense. I have seen procurement teams develop their own bots and machine learning tools in-house at relatively low cost. If you want to attract and retain the very best talent you must adopt a digital culture, to make a strategic impact and not get bogged down in mundane and repetitive tasks.
The future is digital, with ever more opportunities for procurement and supply professionals.