Procurement 4.0: Gone Digital
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Procurement 4.0: Gone Digital

Just like the rest of the world, procurement has gone digital. And there’s no turning back. Our digital way of life is fundamentally reinventing how business is done – from operational processes to customer engagement.

The proof is as close as the local coffee shop. There, you’ll see a bevy of smartphones and tablets – the realization of workers’ desire for flexible office space.

Mobile access to Big Data generated from the Internet of Things and Industry 4.0 is allowing decision makers to get the information they need anytime and anywhere. Advanced analytics is accelerating decision making without sacrificing accuracy and performance quality.

And business networks are bringing a level of collaboration that is highly efficient, productive, and value generating – even if team members are scattered across the far corners of the world.

The Unsung Heroes

Procurement professionals have long been the unsung heroes of adapting to such changes, operating under the mantra of “costs and savings.”

And the most innovative ones are leveraging self-service portals, mobile apps, cloud solutions, and social collaboration tools to streamline processes and manage spend.

By using technology to simplify traditionally complex purchasing experiences, procurement leaders are empowering buyers to comply with internal policies and best practices while keeping costs down and raising the strategic value of every purchase.
Procurement organizations are regularly tasked with delivering buying experiences and supply chains that are fast, simple, sustainable, and low risk. But at the end of the day, it all boils down to adding value to the delivery of services and goods to customers. And this, is the future of procurement.

From Backroom to Boardroom

As businesses continue to transform purchasing processes and optimize supplier networks, procurement organizations have an unprecedented opportunity to move from a back-office cost center to a strategic boardroom partner and to fuel innovation that impacts both the top and bottom lines.

Take the coffee-pods market as an example. To advance their mission in delivering the perfect coffee experience, companies are simplifying the buying processes and focusing all business-related activities on generating value for the enterprise and the customer.

One company is now handling the entire buying cycle – from pricing and quotes to orders – using a cloud-based application.

Not only is this digital strategy making it easier and more intuitive for its customers to buy coffee (the application can draw on purchasing data to replicate previous orders without having to re-enter them and make recommendations for new items, for instance), but also allowing the coffee retailer to tap into market data and customer preferences to reinvent its business model.

And in this way, it is increasing sales productivity, elevating consumer adoption, and enhancing its understanding of the buyer engagement cycle.

Blending data analytics with decision support is also empowering brands to drive greater visibility and insight from their supply chain and operations. And this too is creating value on several fronts, including: and deliver

  • Supplier innovation: By analyzing suppliers and their capabilities more critically, procurement s helping to accelerate the introduction of new products and find new ways to drive down material costs.
  • Risk management: Analyzing spend and supplier data across categories down to the component level, procurement can uncover emerging risks that may lead to supply shortages and production disruptions and prevent them before they happen.
  • Secure and sustainable supply chains: Mapping suppliers against order schedules, procurement can identify the right mix to ensure that all materials are delivered just in time at a high level of quality and in the right quantity.

From cost savings to value generation

Procurement is without a doubt a different game than it was a decade – or even a year ago.

And the ultimate winners will be those who embrace the digital transformation that is taking hold, reimagine their roles and leverage the technology, data and insights that are now at their fingertips to run simpler and smarter.

SAP Ariba

About the author

Marcell Vollmer, Ariba

Dr. Marcell Vollmer has been the Chief Digital Officer and Senior Vice President at SAP Ariba since January 2017.

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