Unpacking the Digital Transformation Buzz in Procurement: A Framework to Consider [Plus+]

I had a large energy firm ask me about my thoughts recently on “digital transformation” and “digital business strategies,” given that senior management was looking to keep up with the Joneses and get a digital strategy in place. I jokingly mentioned that they probably had multiple management consulting firms trawling through their hallways looking to sell a digital strategy and transformation project. They laughed and said the consultants were indeed already clamoring to do this work.

Don’t get me wrong: having a c-level initiative du jour can be a powerful force to use for “organizational judo” within procurement. It’s the proverbial burning platform (or at least smoking platform) that can be used to light a fire and drive some change. The “digital” phenomenon is replete with buzzword phrases right now, and that’s a shame, because the impact of new digital technologies — and the new processes, strategies and operating models that they enable — can have a profound effect on procurement and the stakeholders it serves.

So before you go hiring that big consulting firm, you may want to read this “dummy’s guide” to procurement digital transformation. I’ll introduce a graphical framework and then unpack the drivers to explain how procurement can use these issues to make all of this digital stuff real. There are a few dozen specific trends and associated capabilities in play, and although not all of them will be in force for you, it’s worthwhile to work through and see which ones are most relevant and hold the most opportunity.

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