As digital disruption impacts companies across all industries, it’s creating new channels for customer and partner interactions that are upending core business models and industry dynamics. “In turn,” Accenture points out in a new report, “companies see their future relevance and viability under fire.”
In “Next Generation Digital Procurement,” the global consultancy says these companies are now racing to embrace digital in order to transform key business areas. Procurement has been largely left out of these conversations, and hasn’t commanded the same level of attention or investment as marketing, sales, service and other departments.
“True, companies have enthusiastically embraced eProcurement systems and even cloud-based procurement tools. But it’s time to move beyond simply replicating the same tedious procurement processes with new software,” Accenture points out. “Leading companies are taking the next step to create a true digital procurement organization.”
An Amazon-Like Experience
By Accenture’s definition, digital procurement “automates repeatable tasks to boost efficiency and potentially drive down costs.” It also equips stakeholders across the business with real-time access to insights and analytics through artificial intelligence (AI) and user-friendly online tools.
Digital procurement strategies also deploy new and smarter ways to infuse data models to enrich day-to-day operations and decision making. This, in turn, transforms how buyers interact with suppliers and other third parties by serving as a platform for new levels and types of collaboration.
“In essence,” the company states, “digital procurement enables the ‘Amazon-like’ experience employees now want—but currently aren’t getting—in the workplace.”
5 Steps to Successful Digital Procurement
According to Accenture, digital procurement gives decision makers better visibility, reduces risk, and boosts compliance—ultimately increasing spend under management and driving more value for the business. “But adopting digital procurement is a tall order,” the consultancy admits. “It requires what we call a ‘compound system of knowledge,’ which encompasses five key elements that most procurement organizations struggle to fully implement or operate.”
Here are the five key elements that support a successful digital procurement initiative:
- Data. Data underpins everything a company could do to predict the needs of people, know which goods or services are available to best meet those needs, determine which suppliers are the right ones and identify the right price to pay. To build a true digital procurement organization, companies should consider an intentional strategy to capture far more data—internal and external—than they do today.
- Technology toolbox. This includes the technologies that harness and make sense of data: AI, natural language processing (NLP), analytics and bots. By combining relevant data and these highly-advanced technologies, a company can automate and enhance a wide range of activities and processes—and, in some cases, go beyond simple automation to provide advanced intelligent support.
- Intuitive user experiences. Without a compelling user experience, people will find a way around using the digital tools—whether by not buying something they really need because it’s just too difficult or time consuming, or figuring out another way to get it.
- Skills and talent. Put together a cross-functional team of people with distinctly different skills, including: data scientists and AI experts; category/business experts; IT professionals; and design professionals. “Procurement should build deep skills across all four of these areas and combine them in ways that amplify outcomes,” Accenture states. “Investing in any one of them is not enough, nor is investing in all without a cohesive vision for how they work together to enable the digitalization journey.”
- New policies, procedures and operating models. Digital procurement gives all stakeholders—both company employees and suppliers—new ways to collaborate and interact, as well as access to more robust data and insights. To fully benefit from these new capabilities, Accenture says that a company should review its policies and procedures and ensure everyone understands their roles and responsibilities in the new procurement process and how they can make the most informed decisions.
