Procurement has seen rapid change within the enterprise, with the opportunity to become more strategic, collaborative and technology-driven. This momentum is expected to continue in 2020 and beyond with procurement as an important and integral function of an enterprise through digital technology.
Innovation through digitization can be applied to procurement roles in order to increase efficiency, cut costs, and assess overall performance through improved analytics. But most procurement departments, while rating their digital knowledge as high, haven’t yet updated their processes as much as they could. Many also find the range of available technology to be a bit overwhelming.
Results from Deloitte’s recent Global CPO survey clearly identifies the need to continue to bring in digital advancements as part of a larger transformation effort. The report summarizes that the best word to sum up the scenario being faced by CPOs right now is complexity. As their range of responsibilities increases, so does their need to manage complex initiatives and challenges. Research findings suggest that CPOs should tackle this problem by proactively addressing ‘bad’ complexity and embracing ‘good’ complexity.
For example, supply chain disruption events have significantly increased perceived supply market risk, yet the majority of digital tools that are built to spot and predict these risks in have proved to be ineffective. This hinges on one key initiative: embracing digital transformation. It’s no longer just a buzzword, but an imperative. Procurement organizations that do embrace both the complexities and digital solutions have been shown to have:
- demonstrably stronger digital capabilities than their peers
- tighter alignment with key stakeholders like IT and risk management
- higher levels of contingent talent and cloud-based apps (especially those with predictive analytics)
As of 2019, only 54% of organizations have started the process of digitizing and automating standard procurement processes, but only 2% have fully automated everything. This lack of progress is usually blamed on a deficit in both budget and IT skills, but most procurement departments do recognize the value of adding in technological advancements like:
- predictive analytics
- Robotic Process Automation (RPA)
- The Internet of Things
- Artificial Intelligence
Most procurement organizations still have a ways to go and have not implemented much in the way of automation in the last two years. While we’ve seen some progress, the reality is that implementing new digital technologies has been slow. But positive projections from sources like the Deloitte survey suggest that new cloud-based technologies, associated disruptive technologies, and end-to-end data platforms will accelerate adoption. Expect to see more of these emerging digital trends:
- More collaboration between procurement and data science teams: Linking purchasing activity with data will give organizations a much broader view of historical spending. This will make it possible to create a more actionable dashboard by using Machine Learning and AI to shape unorganized data sets.
- Procurement will continue to be impacted by disruptive technologies: Expect to see procurement teams continue to invest in AI and RPA capabilities. Processes will become more efficient as things like repetitive tasks are automated and combining scripted RPA with AI.
- Data is becoming the strategic asset: Driving intelligence from the data within cloud applications is a big opportunity in procurement. Solutions like Suplari are connecting multiple suppliers and stakeholders, collecting strategic information that can be leveraged to drive strategic long-term value.
We expect to see the future role of procurement evolving and changing in line with a more rapid pace of digitization implementation. Suplari’s advanced AI-driven analytics system quickly push this forward in your organization.
Contact us to schedule a time to see a demo, or just reach out to learn how we can help your team plan for success in 2020. We’re happy to help in any way we can.