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Does procurement need a digital strategy?

Does procurement need a digital strategy?

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Like it or not, digital technology has taken over our lives and is here to stay! Today, mobile devices have transformed the way we shop, pay, eat, travel and network. These technologies are transforming the way we work too. They are changing the way we discover, connect and collaborate with our trading partners, with access to insights and intelligence that allow us to make better, more informed decisions.

Why Digital?

Digital technology - cloud, mobile devices, social media and Big Data - can deliver improved procurement performance through reduced costs, faster access to procurement platform solutions, accelerated access to information, flexibility in working, increased innovation and creativity, and improved procurement intelligence. To reap these benefits, organizations need to put in place a Digital Procurement Strategy for harnessing digital technology within the procurement context.

But a digital procurement strategy is more than just using mobile 'shopping cart' applications or social media for advertising Invitation to Tenders (ITTs). Ideally, it should make use of cloud, mobile technology, social media and Big Data to achieve its strategic objectives such as cost reduction, risk mitigation, innovation and CSR. It should also address internal adoption of this change, and developing the skills of procurement staff to take advantage of digitization. In principle, the ideal digital procurement strategy should be a healthy mix of the following:

Cloud Technology: Using cloud technology makes eProcurement solutions that were previously cost prohibitive, more affordable, quickly accessible and consumable on demand. It provides the potential for previously unimaginable instant integration between applications, platforms and social media.

Mobile Technology: Provides anywhere access to procurement executives and greater scope for flexible working.

Social Media: Offers tremendous scope to converse with external stakeholders, enabling benefits like cost reduction, innovation, responsible procurement, and risk mitigation. But organizations will also have to put in their best effort to gain and retain preferred supplier status.

Big Data: Enables the organization to make sense of what would otherwise be unmanageable data. Organizations need to put in place analytics which deliver procurement intelligence, to enable timely decisions as well as 'closed loop' integration with eProcurement platforms – paving the way for intelligent automated decision making.

The Advantages

According to Dr. Gordon Murray the strategic procurement specialist, a robust digital procurement strategy will result in “improved procurement performance, reduced costs, greater innovation and faster results across the board”.

Flexibility – Thanks to cloud technology, integrating platforms and making these platforms easily accessible in a more cost-effective and streamlined way is now a reality!

Transparency – Social media, when in line with brand principles, can make a company appear more transparent, target specific audiences directly, be more innovative with messaging and reduce costs. It builds trust with consumers and can be a place to identify opportunities.

Efficiency – From data collection and analysis to reduced transaction costs, the first step to an effective digital strategy is identifying which ones work for you. Whether it’s working remotely, outsourcing more effectively through a services marketplace, or more accurately assessing client needs through integrating data analysis with eProcurement systems, a digital strategy is sure to bring in increased efficiency, reduced waste and costs and a more productive outcome.

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