What Is Digital Procurement?
According to Accenture, “the procurement organization has been largely left behind in the digital revolution.” While this may be true in some respects, it doesn’t necessarily indicate that digital procurement can’t be achieved through the use of existing technologies such as Enterprise Content Management (ECM), which consolidates several core business technologies to provide real-time insights, superior process control, and streamlined decision making throughout the procurement process.
The Basics of Digital Procurement
The purpose of digital procurement is to automate repetitive, time-consuming tasks that are detrimental to efficiency and burden your organization with unnecessary costs. By equipping procurement professionals in your organization with the tools they need to improve daily operations and perform their job at the highest level, you can reinvent the way you approach interactions with suppliers and third parties by supporting an integrated platform that brings all stakeholders to the table for direct collaboration.
It’s no secret that error-prone business processes can derail procurement and cause friction between your organization and the suppliers it depends on. Digital procurement is designed to mitigate these challenges by streamlining the procurement process and insulating it against human error.
The Benefits of Digital Procurement
When considering whether digital procurement is right for your organization, it’s important to consider how it will impact your organization from both a cost and efficiency standpoint. By digitizing procurement, you are effectively equipping your team with the tools to work faster and smarter — not harder. But what makes digital procurement such a game-changer for enterprises?
Hello Data, Goodbye Uncertainty
It’s easy to lose sight of the fine minutiae of your procurement process, but the only way to see the “bigger picture” is by collecting actionable data to help you understand how you can improve procurement. In a highly manual procurement department, it’s impossible to track data on what was purchased, at what price, when, and for what reason. These insights are made available with digital procurement, allowing for more informed decision making.
Equipped With the Tools for Success
For many companies, digital procurement is only one aspect of digital transformation that they plan to pursue. From Accounts Payable Automation to Mobile Content Management and Records Retention, the ECM technologies that help you digitize procurement are also effective across other business units and processes. In other words, ECM-based digital procurement equips your organization with the tools to succeed wherever efficiency is a concern.
Superior Spend Management
Digital procurement paves the way for procurement automation, which means a more structured procurement process that suffers from fewer instances of off-contract or non-catalog spending. Purchasers are no longer required to go looking elsewhere for materials from unvetted suppliers you haven’t established rapport with. This means less tail spend and a greater focus on boosting the spend being managed directly by your procurement team.
Industry-Leading Cost Savings
Digital procurement connects your organization with its suppliers in more ways than ever before. Of course, cost savings are a primary driver for any process digitization or automation project, but it’s important to underscore this benefit so your organization understands how these savings are being achieved. For example, by consolidating procurement operations to a single platform, it becomes much easier to compare prices. Similarly, users can examine pricing trends to identify when a purchase price seems higher than it should be.
One Platform, Unlimited Possibilities
It’s impossible to understate the value of a single-platform solution. You don’t want your procurement team to constantly navigate from one window to the next to complete purchases. If they can make decisions from one screen without getting lost in extraneous information, it will improve transparency across your entire supply chain. Fairmarkit recommends “sharing data with your suppliers” as this can give you “insight into next-tier suppliers and upstream value chains.”
If 2020 taught us anything, it’s that even the most prepared organizations can’t predict the future. Business interruptions come in all shapes and sizes, including:
- Widespread health-related events
- Geopolitical risks
- Climate change
- Economic uncertainty
- Human error
- And more
By digitizing your supply chain, you are taking the first steps to insulate one of your most business-critical processes against factors you can’t control.
Is Procurement Digitization Right for Your Company?
Procurement digitization plays an important role in your company’s digital transformation, but it’s only one small step in the grand scheme of things — if automation is a goal for the future of your company. Ideally, companies that invest in digital procurement will expand their solution to encompass the entire P2P cycle. With an end-to-end solution automating every step of the P2P process, your company can save time and money by identifying and eliminating process deficiencies that hurt businesses.
To learn more about procurement digitization and Accounts Payable Automation, contact IntelliChief today.