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Spend Matters welcomes this sponsored article from Markus Hoppe, principal director in the Accenture Strategy Sourcing and Procurement Practice.
Leading companies are already leveraging digital technologies to create an entirely new way of doing procurement. But despite the examples of these leaders, we still see many companies struggling with how to apply digital concepts to their own functional journey. This post shares insights from Accenture Strategy’s research into the Future of Procurement, which clearly reveals the role and impact of digital technologies on procurement operating models.
To do more than achieve incremental improvement procurement executives need to challenge the traditional view of the technology they use. Here are three considerations that will help shape a realistic digital procurement vision and give executives a better chance of moving their digital procurement initiatives beyond buzzwords to reality.
- Digital is not about IT. You need to think about how to apply advanced technology through the lens of how it can generate superior organizational performance. New value opportunities now sit in the technology stack that were previously difficult to achieve, but they will not emerge if you focus on how the technology fits your current operations. Business and technology acumen are required to unharness new organizational capabilities that move the needle in terms of value. Using technology in the right way can solve some of procurement’s toughest challenges such as non-compliance, tail spend management or even gain new insights through advanced analytics.
- Embrace the new players in the ecosystem. A shift to a more open and inclusive mindset is required in order to drive superior value from the digitalization of the procurement function.
- Being open — Access to additional insights comes only when companies are willing to share. The power of ecosystems only emerges if a large portion of the underlying information is exchanged between participants. This requires companies to reconsider their information and content strategies.
- Bringing the outside in — Increasingly, technology capabilities will be provided through external platforms and service providers. However, there will only be few alternatives to cloud source-to-pay technology.
- Increase your startup IQ — The speed of procurement technology evolving in the startup community increases every day. This requires the procurement function to be actively connected to this community for access to the latest capabilities that will drive competitive advantage.
- Welcome AI — Virtual colleagues are becoming the new normal, either as coworkers or as counterparts in service/helpdesk roles. The teams need to be prepared to embrace the new roles in the organization.
- Just get started. There are “no-brainer” opportunities every company can consider embracing to create immediate value.
- Analytics — Application of advanced analytics in any context can provide additional valuable insights. For example, companies are using financial analysis of suppliers to reduce risk, and modeling demand and future growth of the industry and linking that to supply markets to highlight potential bottlenecks. Given that most companies have already embarked on the analytics journey in other functions outside of procurement, the likelihood of finding skills / technology ready-to-use within your enterprise is high.
- Robotics Process Automation (RPA) — Like many shared service initiatives, robotics process automation involves teaching someone repetitive activities. Some of these repetitive processes could be made more efficient with the adoption of RPA. One opportunity is for organizations to replace these repetitive transactional activities, such as invoice processing with RPA. Using RPA can free up resources to focus on more strategic, value add activities.
So how can your organization make the transition? Take a DIGITAL SAFARI.
Come be a part of the adventure: Accenture Strategy would be pleased to host you on a Digital Procurement Safari, an interactive showcase that enables executives to not only dream of the art of the possible, but also experience it first hand in our Innovation Labs. No dinosaurs on this tour, folks! Guided by digital procurement subject matter advisors, visitors are encouraged to fully immerse themselves in the Future of Procurement, where digital disrupters challenge the status quo, and next-gen solutions/startups make it all possible. For more information or to book your trip, please email firstname.lastname@example.org directly.