Efficio on Transforming the Face of Procurement

In a rather revealing three-part series over on our US site, global procurement consultancy firm Efficio tackles the age-old problem of ‘making it easier to do business with procurement,’ focusing on the advantages to be drawn from using technology for the supplier, customer and other stakeholders.

A recent survey Procurement 2025: Is digital transformation driving more effective procurement? conducted by Efficio and Cranfield University examines how 225 senior procurement professionals from across the globe view the digital procurement landscape and its impact on their organisations. A few of the key responses, in aggregate, indicate that while technology is allowing more data-driven decision-making in procurement, the biggest barriers to harnessing that power further is a lack of talent and low levels of supplier support. It also indicated that companies do not feel they are getting the full benefits of technology because there is a desire to make better use of existing technologies rather than investing in new ones.

By way of response, Efficio’s three articles look at how to ensure a positive return on technology investment; how we use technology to develop strategic supplier relationships and ultimately create a more user-friendly procurement experience.

Tech Alone Can’t Solve the Problem

The survey showed the single most popular procurement objective in 2018 was to transform processes using technology, but, it also revealed that 82% of organisations prefer to make better use of existing technologies before investing in new ones. So perhaps technology is so far failing to a) meet expectations and b) offer a return on investment.

This article offers Efficio’s suggestions for organisations to address this. Of course, technology alone, it says, cannot be expected to solve all of a business’ problems: “Companies often slip into the mindset that technology alone can solve their problems without realizing that other changes will need to be made in parallel to achieve the optimum results.”

In fact, although the survey does find that new technologies are driving a lot of activity in terms of digitalising, irrespective of whether or not companies actually have the right processes in place to support it, Efficio recommends that you should firstly understand the processes that will be required to make your technology deliver a benefit. So it’s important to invest some time upfront in understanding what your expectations are.

But what about the skillsets needed to support the technology? Nearly three-quarters (72%) of the survey respondents agreed that lack of talent is a key inhibitor to technology delivering on expectations. Again, Efficio offers, it’s important to first understand how the role of your people will change following the implementation of new technology and recruit or upskill accordingly – and it goes on to look at instigating longer-term value.

Part of that value comes from involving vendors in problem solving. “Procurement functions often miss out on the value of technology simply because they try to design the tools themselves rather than tapping into the huge innovation that’s taking place in the market every day — much of the time by small start-ups,” they say. Read the whole of this research response here. Then in part two …

Using Technology to Develop Strategic Supplier Relationships

…  the firm looks at why , when two-thirds (64%) of respondents agreed that strategic supplier relationships will become increasingly important as companies look to achieve their future objectives, only half (52%) have formally selected their strategic suppliers.

This gap, it says, indicates that while there is consensus on the value of the strategic supplier relationship, many companies have yet to define what a strategic supplier truly looks like, much less how technology can help to develop these relationships. So it outlines the characteristics of what a strategic partner might look like and compares that with the survey findings. It then follows up with how a business can facilitate the information flow between itself and the supplier and how  technology can be employed to improve strategic supplier relationships, so that they are better enabled to deliver for you. Read that in full here.

Finally, the discussion turns to the holy grail of:

Creating a More User-Friendly Procurement Experience

Procurement departments often cite lack of engagement from the wider business as one of the reasons why they struggle to add more value to their organisations. Here, the article gets into why some stakeholders take this approach and progress work streams and discussions with suppliers without involving procurement.

Understandably, when asked about top strategic priorities for the next five years, the single most popular response was improving customer experience, with two in five respondents (40%) ranking it among their top three priorities. So Efficio turns its attention to why procurement is still bad at delivering the same ease of use and personal experience we get from buying in our home environment. It concludes that one way for procurement to enhance user experience is to allow the business to self-serve more frequently to meet their procurement requirements. Read that argument in full here.

The three posts turn the face of procurement around to make it look ‘outwards’ – a refreshing take on how we should eventually aim to stop being ‘procurement’ as stakeholders know it, and start being ‘procurement’ the giver of insight.

 

 

 

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