Five Precepts to Digital Procurement Transformation
Industry 4.0 business is upending the traditional ways in which procurement has been operating so far. With a plethora of opportunities that 4.0 presents, procurement is a trusted business advisor and strategic partner. Besides expedited productivity and increased savings, procurement can achieve so much more with the transformative power of digital capabilities. It offers advanced data analytics to build new business models, run lean, be agile and responsive to customers and stakeholders. Gone are the days when procurement would be only tactical; procurement is more strategic now for organization’s holistic growth.
Talking about holistic growth, it reminds of the moral principles of Buddhism. The five essential precepts that guide every Buddhist toward a more transformative living can guide procurement too. So this season of Vesak, let us renew our strategy to render procurement a digital transformation. Here are the five precepts or commitments that procurement should follow-
DIGITAL PROCUREMENT TRANSFORMATION
Data informs your prediction about the needs of people. It helps you identify goods and services that the market needs. This information prompts you to look for the best suppliers who can provide you at the best price. Procurement companies are already extracting a lot of transaction information or line-item data, but that is not enough. To make your prediction formidable, you’d need to extract external or third party data. Deep and broad category data along with contextual data (requisition review and approval, contract set-up, or the RFP process) are helpful. Consider requisition review and approval, contract set-up, or the RFP process as examples of data.
Futuristic technologies like AI, natural language processing, analytics, and bots are no longer a hype but reality. The irony is, to start with advanced technologies, one has to start with process automation. In digital procurement transformation, technology is invincible and imperative to report on unstructured data. In procurement, technology helps sourcing events or spot buys on the basis of buying history, supplier performance, ratings, pricing, etc.
You cannot harness the benefits of digital procurement transformation without crafting attractive and intuitive UX/UI. Great features invite stakeholders to explore digital capabilities basis the effectiveness of the software in buying and generating useful data. So when you select your source-to-pay suite, remember the importance of an integrated dashboard and customized bots that’ll run your orders at a single click. Innovative user experience is the third precept to a successful digital transformation of procurement. Without it, not only you are unjust to the available data, your investment in technology, but also the whole intent of going digital.
In the domain of procurement, your intent of digitizing the practice has to be fulfilled by your talent pool. Besides data, technology, and user-friendly innovative design, the fourth precept for a successful digital procurement transformation is a cross-functional team of people with varied skillset including data scientists, AI experts who can manipulate algorithms, category managers who can advise on applicability, and IT professionals. In this entire restructuring of your talent pool, do not miss out on design engineers.
Policies, Procedures & Operating Models
The fifth and the final precept of digital procurement transformation is to review your procurement policies, procedures, and operating models. From stakeholders internal to an organization to external participants such as suppliers, the need that digital procurement fulfills is the creation of a unanimous platform that facilitates superior collaboration and interaction. This way, each participant is aware of his/her roles and responsibilities and how their decisions will serve the organization.
I am wishing a great new beginning to your procurement practices & Happy Vesak!
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