Digital transformation of Procurement is no longer an option – it’s imperative

“Digital technologies can reduce procurement quality problems by as much as 60% to 70%” - BCG

Why it’s so important to go digital in procurement?

These days mostly all the growing companies are using a strategic model based on leveraging their digital capabilities to its maximum. Procurement is a vital area where these initiatives are changing the whole process.

When we look at digital transformation in procurement we should have a holistic approach to it and pay attention to the operations side apart from the software side. It is all about automating the old processes to have an effective and efficient process in place which will lead to saving of time and money.

The impact of digital procurement is across all the areas in the department whether it is strategic, transactional, or managing supplier side of things. The usage of disruptive technologies makes strategic sourcing predictive, transactional procurement automated and supplier relationship management dynamic.

Digital in Strategic Sourcing

Some of the most important aspects of Strategic Sourcing is the ability to source products and services, pick the correct suppliers, and pinpointing the best-value alternative and being able to justify it. This would generally be arranged forthright, but advanced digital procurement permits Strategic Sourcing experts to deal with their spending volume as and when required. This capacity to make dynamic, real-time choices takes into account improved accuracy. Besides this fine-tuning, digitization enables a company to get ready for the future by anticipating demand utilizing Artificial intelligence (AI). This uses Machine Learning (ML) to run spend analysis reports, before, during, and after strategic sourcing.

Along these lines, a company can foresee demand and perform a supplier performance analysis before they even start the supplier sourcing process. To put it plainly, AI gives a lot more noteworthy advice to your procurement division about the spend information, and with 78% of procurement professionals having cost decrease as their top business methodologies, the benefits of investing in digital procurement is clear. Eventually, digitization in Strategic Sourcing empowers progressively accurate predictions and expanded transparency in sourcing commodities.

Our commodity sourcing price improved by 2-2.5 % by adopting the digital platform by Procol Solution. – Purchase Manager of a leading Retailer

Digital in Procure to Pay

A lot of procurement division’s time is spent planning requests to supplant existing stock. These administrative assignments act as a resource hog and reduce the time available to think about better approaches to improve efficiency in the procurement procedure. To overcome this hurdle, digital procurement gives a mechanized framework to deal with these tedious but simple tasks Organisations. Robotic Process Automation (RPA) helps in repurchasing items leveraging already existing stock data and previous purchase data. This helps in reducing human intervention thus reducing errors and efficient allocation of resources.

Not only digital procurement can automate the ordering process, increase the productivity of the procurement professionals, but also smooths out the procedure from orders to payment, thereby, wiping out any scope for human errors.

Digitised P2P system has enabled efficiency, transparency, reduction of turnaround time and reduction in errors. – Group head India’s largest exporter of branded processed food products

Digital in Supplier Management

Supplier management has the most elevated level of human contribution among all procurement forms. Procurement leaders are tasked with developing connections and limiting risks. But the most wanted quality in them is the understanding of their suppliers inside-out.

If suppliers are not adhering to high moral measures, there is a risk that their poor norms will contrarily effect upon the company’s standard and eventually reputation. However, with numerous suppliers to monitor, how does a company stay on top of everything?

Yet again, digital procurement is the answer. An organization’s procurement team will have the option to screen potential supplier risks, on account of information gathered from third-party sources.

Drawing in with clients and industry specialists through methods such as crowdsourcing yields important information for procurement and supply chain professionals This would then be able to be utilized to identify risks in developing new ideas. It also permits the company to consistently assemble data about their vendors, resulting in being able to develop management strategies that predict opportunities and risks. All this goes towards helping the organization to optimize its supplier acquisition procedure.

The Procol solution has helped us achieve significant improvements in sourcing cycle times and enhanced communication and collaboration both internally and with our suppliers. - CPO of India’s largest agro commodity exporter.

Conclusion

Digitizing the procurement process is just the initial phase in a continuous journey towards procurement transformation In the following two to four years, we’ll see further development to next-generation strategic procurement, where data from outside a business’s ecosystem can offer data for advance level decision making. Organizations must start their digital procurement journey now to ensure they’re not deserted in the race for competitive advantage.