Collaborative Procurement

Digital transformation is all about the impact new technology is having on business and the changes business must make to move into the digital evolution. Businesses need to re-examine and change core business processes as they take on and implement new technology. Digital transformation is an important step for designing and bettering new operating set up.

Procurement includes purchase planning, supply management, supply-chain handling, sourcing methods, logistics, price negotiation, inventory control, risk management, legal and value analysis. Procurement involves a lot of risk assessment in order to obtain the best deal from suppliers to boost corporate performance. It is a constantly evolving and driving innovation, and has an important role as a value contributor helping an organization to grow. It creates value from the supply market by building relationships with key stakeholders. Procurement influences the price of a company’s product and can impact operating costs. It is an empowered business unit, one that ultimately relies on people’s interpersonal skills.

Additionally, procurement requires a deep understanding of the day-to-day operating tools such. Digital transformation has a large impact in the negotiations, control and delivery of a product. Going digital is necessary, for simplifying and improving the procedure of procurement.

Portals that allow customers or vendors to view and enter information directly improve productivity by decreasing data entry and customer service calls.

• Increased Productivity: Digital Transformation allows employees connect face to face with colleagues and customers to share information in real time. It allows for a true collaborative work space designed specifically for a team to ensure employees have both the communication and business tools they need anywhere, anytime, from any device. By putting voice, chat, video and business critical applications in one collaborative work space, employees can save time, become more efficient and productive.
• Faster and Accurate Decision Making: Digital Transformation makes virtual workspaces available to promote collaboration and enable teams to make faster decisions as they approach conflicts and solve problems together.
• Optimize Performance and Multiply Savings: Digital Transformation gives one smooth access to a rich, perpetual updated archive, best processes and workflows, checklists, scorecards, patterns and tools for every purchase. It allows these to be done while it leverage cloud economics, infrastructure, maintenance and ongoing operational and software management costs are virtually eliminated. It reduces time, effort spent on routine tasks, including managing demands, contracts and data analysis. It streamlines and automate spend management and also optimize performance and increase productivity. Digital transformation increases user adoption, improves customer satisfaction and work together effectively with business partners. It gives room to cut total cost to a fraction of current spend.
• Automated Compliance Management: A lot of companies, particularly those with global manufacturing and service imprint, value leakage is still one of the main untapped means of procurement impact. Advanced compliance management tools act as a vigilant guardian, scanning every procurement transaction, both from structured (ERP systems) and unstructured sources such as invoices or expenses, to identify and weigh the leakages, and duly provide a solution.
• Procure to Pay: Digital Transformation offers Procure-to-Pay solutions which were among the first digital tools available to support operational and tactical procurement activities. Since their introduction in the early 2000’s, they have evolved significantly in functionality, covering an increasing scope of the end to end process, from sourcing, to payment of the suppliers.
• Prevents Value Leakage: Digital Transformation in Procurement prevent value leakage with the use of ERP and transactional systems to manage the procure-to-pay (PTP) process, and performance management systems.
• Supplier Collaboration: Digital Transformation facilitates a better exchange and interaction between external partners, including suppliers, research partners, and intellectual property providers. It works just like a social network for the company and its supply base, enabling better cost optimization, faster interaction, and wider access to external innovations.
• Increased Efficiency
• Increased sales, productivity and profits.

Digital impacts all areas of procurement – both the tangible and intangible, including negotiations with suppliers. Drones, self-driving trucks, robots, AI (artificial intelligence), IoT (Internet of Things or Big Data) 3D printing and augmented reality are the main digital areas that have a tremendous impact on purchasing power. Their role is to replace humans for the repetitive and ‘boring’ task.

Digital transformation influences the business environment positively, changing the way a business operates, and significantly changing its entire strategy and overall organization. To succeed, a digital procurement strategy is necessary for all procurement experts. Digital transformation helps procurement increase collaboration and engagement.

In summary, procurement strategy aims to create significant value for the company. In a VUCA world (Volatile, Unpredictable, Complex and Ambiguous), companies will have to rethink how procurement can interact with digital technologies to overcome business challenges and take advantage of market opportunities.