The economic and strategic benefits of digitizing processes are real. The proliferation of technology does not always help companies figure out where to start the transformation process. The article discusses that the company should focus on solutions, not products.
Artificial intelligence and automation process automate manual tasks and free up time for more strategic actions. The proliferation of competing technologies prevents companies from understanding how to begin the transformation process. This is one of the reasons why many companies have just started experimenting with digital tools.
Less than 10% of companies implemented procurement-supply solutions based on key technologies, such as big data, Internet of things, serverless architecture or blockchain technology, according to research from procurement leaders.
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Digital technologies provide a competitive advantage by increasing the speed and quality of purchases, reducing risks and stimulating innovation. As supply chains become global, they become increasingly complex and integrated, and the boundaries between suppliers, partners, and customers are blurred.
Companies using new tools to improve collaboration with all interested parties will improve their speed and flexibility by reducing the time from purchase order to invoicing. Automating procurement-supply processes, in turn, will reduce the time spent by teams to pay bills and free up time for more strategic work, such as finding smaller, more innovative suppliers. Those who are waiting to digitize purchases risk replaying more agile competitors.
Successful companies have a deep understanding of the supply and digital technologies market to create powerful ideas. Their purchasing departments use supplier innovations and occupy a leading position in the field of digital experiments in organizing or developing new solutions.
Improving procurement efficiency and effectiveness
Companies are in no hurry to introduce digital technologies in procurement for several reasons. Many had a bad first experience in implementing digital solutions. For others, the return on investment is unclear, or the executive team does not understand why procurement -supply should be a strategic priority for investment in information technology. As a result, those responsible for the company’s information technology development plan often deprive the priorities of purchasing decisions.
But the business case for digital procurement is becoming more and more obvious as companies gain experience with these technologies and monitor their effectiveness. And the pace of change is accelerating. One of the key signals is the amount of cash that investors are investing in the development of digital procurement tools, believing that they will bring significant profit.
Automated and flexible operations.
Artificial intelligence and robotic automated processes transform a critical range of procurement activities, including cost analysis and pay purchases. These tools increase efficiency, speed up processes and reduce errors.
New technologies paved the way for collaboration platforms, real-time data collection, predictive analytics, and blockchain. So, the company Volt Technology has launched a blockchain platform and uses artificial intelligence that allows introducing new processes. These tools allow teams to easily share data and help cross-functional teams develop solutions for code developers with suppliers and internal stakeholders. Working together without friction speeds up the cycle time by improving the internal coordination and performance of the supplier.
To create an accurate source of data, the company introduced a collaboration platform that included contract recordings, savings opportunities and methodologies, key metrics and analysis, and confirmation by interested parties. The platform became the only source of truth for all procurement data and included quick access to all business units and functions. This paved the way for transparent and coherent decision-making on budget processes and eliminates chronic differences over overall savings that have reached outcomes.
Leading companies use digital tools for advanced category management, improved search strategies for suppliers and improved forecasting. Building blocks are richer data sets, optimization mechanisms, and tools for demand management and compliance enforcement. Advanced category strategies help to purchase departments cut costs by buying better and spending better.
Focus On Solutions When It Comes To Digitizing Operations was originally published in Data Driven Investor on Medium, where people are continuing the conversation by highlighting and responding to this story.