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Procurement Needs a Digital Strategy

In this white paper, we discuss how a digital procurement strategy addresses the use of cloud, mobile technology, social media and Big Data to achieve its strategic objectives such as cost reduction, risk mitigation, innovation and Corporate Social Responsibility(CSR).

Procurement deals with suppliers, internal process owners, as well as the organization’s buyers and distributors, and can gain from the cheaper, broader and innovative networking capabilities that digital technologies offer. We believe that in a
short time, no organization’s procurement will be untouched by digitization. Therefore, early adopters can expect to shape the agenda and gain competitive advantage.

A digital procurement strategy is more than using mobile “shopping cart” applications or Twitter for advertising Invitation to Tenders (ITTs). It also touches upon internal adoption of this change, and developing the skills of procurement staff to take advantage of digitization.

The use of cloud, mobile technology, social media and Big Data:

  • Cloud: Using cloud technology allows investing in eProcurement solutions that were previously cost prohibitive, but are now becoming affordable, quickly accessible and consumable on demand. It provides the potential for previously unimaginable instant integration between applications, platforms and social media.
  • Mobile Technology: Mobile technology provides anywhere access to procurement executives and greater scope for flexible working.
  • Social Media: Social media platforms offer organizations tremendous scope to converse with external stakeholders, enabling benefits like cost reduction, innovation, responsible procurement and risk mitigation.
  • Big Data: Big Data enables organizations to make sense of what would otherwise be unmanageable data. Organizations must put in place analytics, which deliver procurement intelligence, enable timely decisions as well as “closed loop” integration with eProcurement platforms to facilitate intelligent automated decision making. 

Conclusion
Organizations need to avoid being shaped by the digital technology, and instead shape their responses to it proactively. To do that a Digital Procurement Strategy is required. Some recommendations on moving forward:

  • Review your eProcurement investment plans and challenge the business case based on the availability of SaaS platforms
  • Review your applications portfolio, ‘as is’ and ‘to be’ to make optimal use of integration potential
  • Review your applications portfolio for business needs – if a business need exists but a solution is not presently available, issue a design challenge to the market
  • Review your use of mobile technology to determine investment plans, establish opportunities for cost reduction and have a clear policy on BYOD
  • Review your approach to flexible working to gain maximum advantage of digital technology

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