The Evolution of Procurement in the Digital Era

Procurement and supply chain management is growing in corporate prominence year after year. An aspect of corporations that started off as just another responsibility of the administrative department, today, it is a standalone vertical with its own C-level executive in charge, and an increasingly intrinsic part of the corporate world.

Procurement — Involved Across the Board

“When I have conversations with other key business leadership, it’s about understanding what their needs are and making sure to align those needs with what I’m doing. That way they can see what they were doing before, what the process was that I used to improve their outcomes, and where we are now. It’s a back and forth that requires being able to listen as well as influence.”

One of the reasons the procurement function has been able to play a larger and more central role is because technology today enables profitable, cross-function influence. From ensuring flexible and efficient supply and consistent quality in products, to improving financial margins and ensuring timely results, almost every aspect of business is now driven by winning combinations of technology and strategic relationships.

This widespread digital procurement transformation is rooted in empirical data and promotes higher engagement with value.

Evidence of Digital Adoption in Procurement

Why Etihad Airways Changed the Way They Procure

“We operate on a massive scale dealing with 28,000 suppliers and over 70,000 purchase orders per year. Previously, procurement was an inward looking, gatekeeping function with limited stakeholder engagement.

To move from a governance style function to a value adding one, we needed experienced project leads, executive sponsors, change champions and plenty of training. Now, our buyers are business enablers engaging with all stakeholders to deliver the best value based on trustworthy supplier information.”

Examples of Promising Technology in Procurement

Procurement is rapidly evolving and taking strident steps to help build competitive advantage. Today’s digital procurement services are using the Cloud, Blockchain technology, Big Data and analytics, and intelligent program design to further the cause every day. There are even more interesting innovations such as these in store for this industry.

These technologies can help detect patterns to provide recommendations or predictions based on spend and supply data from internal and third-party sources. “Moreover, machine learning is providing immediate added value in traditional manual-intensive process areas related to vendor matching and consolidation, spend classification, price and pay anomalies, and price projections.”

2. Robotics Process Automation to Improve Performance: The inclusion of Robotics Process Automation is also driving the worth of digital procurement upward. RPA is already being actively used by forward thinking procurement departments and CPOs, and this is another trend that is set to gain momentum in the coming years.

Testing and integrating the right technologies to power digital procurement strategy is the way forward for many corporates. The benefits are there to be witnessed, and the digitization of procurement looks like it’s only getting started.

Surely there’s more technological innovation — everything from untapped artificial intelligence to quantum computing — on the horizon. But it seems clear that early adopters of digital procurement services and applications can gain momentum in competitive markets. It remains in our hands to reimagine and re-organize the procurement function to deliver real, collaborative value with lasting business-wide impact.

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