procurement digital transformation [shutterstock: 1505234981, Panchenko Vladimir]
[shutterstock: 1505234981, Panchenko Vladimir]
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Digital Transformation In Procurement Has To Start At The Top

Up-to-date data, fully automated processes, seamlessly connected customer/supplier pipelines - for many companies, digital transformation still seems like a faraway future. Digitalization in procurement has to start at the top.

Procurement is entering a new era. Time to evaluate how companies’ digital transformation efforts are coming along!

How farhave they come in their digitalization initiatives? Have they managed to successfullyorganize data, processes and interconnection in procurement? We’ve partneredwith ESB Business School and the German BME (Bundesverband Materialwirtschaft,Einkauf und Logistik) and asked 272 German companies (many of them SAPcustomers) about their digital transformation.

The resultsare not surprising yet still disappointing: Digitalization largely hasn’thappened yet. Every third company is operating without a clear procurementstrategy, and half of respondents indicated that the number of digitalprocurement sources was still low.

Digital transformationis prerequisite for automation in procurement – and yet, in all areas ofprocurement, companies are lacking clear strategies concerning digitalsolutions and holistic automation.

Only a fraction of respondents (15 percent) use digital systems for process optimization in procurement. This is surprising since there are various tools and systems available which facilitate digital transformation.

Delaying digitalization in procurement not the way to go

Companies often see their current success as an excuse to delay digital transformation – why fix it if it ain’t broke? Consequently, they invest too little in sustainable, efficient digital solutions – a decision which will almost certainly come back to bite them later.

In the past, procurement companies often were the source for innovation, diversification and growth, acting as accelerator for digital transformation and automation. This is crucial as procurement is facing and will continue to face many obstacles – fast-changing markets, growing supply chain risks and an ever-evolving workforce, for example.

I thinkthat if companies finally realize the important role that procurement plays,they are making sure they benefit and profit from digital transformation.Furthermore, top management will have to start actively championing fordigitalization to happen. Digital transformation in procurement has to start atthe top to change hearts and minds on the issue.

Only byestablishing a digital mindset in top management can companies sustainablytransform procurement.

E-3 Magazine March 2020 (German)

About the author

Frank Schmidt, Onventis

Frank Schmidt is CEO of Onventis.

1 Comment

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  • Is improvement/growth possible without any change? Not certainly. This makes digital transformation quintessential for businesses to accelerate growth and beat the competition. Nevertheless, digital transformations are long, risky, and can either make or break your business.

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