eWorld – Procurement in the Digital World

One of the presentations at eWorld last week came from Alex Saric, Global Vice President Marketing, SAP Ariba. He talked about “Thriving in the digital networked world – how Procurement can lead the way,” – digital disruption is not just about a technology shift, he says.

As we know, new digital technologies affect not just goods and services, but business models, and the rate of change, or ‘disruption,’ varies widely depending on the industry. So what about Procurement? Whether you believe digital disruption is coming, or has already taken place, it’s important to acknowledge that it’s not something to fear. Here’s a synopsis of Alex’s comments on how to face that challenge; it’s interesting to see where he thinks procurement sits in this transformational age:

In our daily lives, mobile devices are used more and more and in new ways, to buy and pay for things. And businesses are being run this way too, because ‘digital’ can bring your customers a seamless experience: one where everything is automated with no human interference (whether that’s placing orders or checking status in a mobile app). He cited Uber as an example of “no unnecessary interactions, like phoning a taxi,” that can inject error into the process.

Procurement can be in the forefront and lead this change within companies by being connected. This is an opportunity to re-imagine your business, he says, to end up with something that is more highly centred on your customer.

He makes three distinct observations about the state of being digital: it is data-driven, seamless, connected. Data driven is real time information delivered across the Internet of Things; seamlessness is end-to-end across the value chain, connectedness is across all networks on a massive scale.

Procurement leaders know this is coming, he says. In fact, not just economic but technological trends will have a serious impact on procurement in the next three years. The question is, how do you accommodate it into your organisation? So, it’s time to evolve again it would seem; if you aren’t already, you need to be agile, strategic, operational, clerical and managerial. Agility he sees as more important than ever before, to be able to see what’s going on in the market and shift accordingly.

So ‘planning’ becomes the key to attaining this. General D D Eisenhower’s famous quote: “In preparing for battle I have always found that plans are useless, but planning is indispensable,” is what he puts store by. Putting yourself in a position to be able to react to different situations – quickly. This is the crux in a world that is changing so rapidly; it’s about being ready for when you need to change. And because procurement is the organisation’s face to the supply base, it needs to be flexible, perhaps more than others.

Your business networks allow you to connect, that could be with your existing suppliers or to find new ones. They need to be agile. Digital brings relevant information to the right point in the process. It’s not about capturing the data that’s important, in fact, the more you have the less relevant it becomes, it’s about being able to process it and make it useful.

So, in conlusion: “It’s about your mindset. Think about what you want to do and whether technology can help you achieve it.”

As we said in our opening post on eWord, agility and connectedness were recurring themes of the day. We heard later from a SAP solution provider, ‘new’ to us, who talked about how their solution provides even more connectedness without the traditional barriers to uptake. Invenio is a SAP Gold partner, not massive but 430 people across Europe, Asia/Pacific, US and Africa. It offers a budgeting, workflow, P2P portal for enterprises using SAP to help reduce costs. Although, we were told by Kedar Patwardham, Account Director, that the concept could be used for other ERP solutions. He talked about how you can “Control your maverick spend” with easier connectivity using the portal. Here are a few salient points from his talk:

Integration is costly, but what if you could take that cost away, because no integration is necessary? -- user acceptance is higher when there’s no training needed, just internet access or a mobile phone. (It would be interesting to see how this bears out with users -- we may come back to this).

Procurement often complains it does too much work. That’s true he says – you’re doing other peoples’ work. At the moment you are doing 80% of the work while the vendors do 20%. But you can turn that around. Onboarding suppliers alone carries licensing costs and resource time. But how about getting them to do it themselves? You need only to inform the supplier that the portal is coming, so they know where to go if they want to do business with you. The portal makes it easy for them.

And for those of you who hate the SAP screens, he says, this portal requires little user intervention, it’s all done in the background. You can do most of it on your phone, with the tap of a button.

And there’s more here about the firm and the technology.

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