Procurement digital transformation across the complete supply chain enables digitization of end-to-end processes from gathering and reviewing data on sourcing needs to promoting supplier relationship management to ensure quick and efficient procurement of goods and services.
Here are the top 6 advancements that are defining digitalization in procurement strategies:
- Automation: BPA (Business Process Automation) and RPA (Robotic Process Automation) are two forms of automation that may be used in the procurement process. They can assist organizations in eliminating manual work by automating day-to-day sourcing activities such as recognizing business needs, tracking spend, managing suppliers and their information, raising requisitions and their approvals, managing demand in real-time and so on.
- Data Analytics: A data-driven approach to sourcing and procurement can assist firms in gaining insights to define their sourcing strategies well and deliver sustainable savings. Advanced analytics solutions that provide predictive analytics capabilities can predict future trends based on trends and patterns in current and past procurement data. Prescriptive analytics is the next stage where the predictive models based on procurement data aid decision making and can recommend optimal course of action. There are multiple application areas of analytics in procurement – spend and cost analytics, what-If-analysis, supplier analytics, contract analytics, savings analysis, spend forecasting, etc.
- Cloud: Cloud-based solutions enable businesses to save money on upfront costs and improve real-time data exchange.
- Artificial Intelligence: AI allows procurement organizations to simplify complex procurement processes and enhance decision-making to make the process more efficient and effective. AI can be used across different areas in procurement from spend analysis to contract management and strategic sourcing.
- Blockchain: This technology helps in accelerating and adding security and transparency to procurement processes. It can help buyers to ensure authenticity and traceability of all goods throughout the purchasing cycle. Blockchain could also enable creation of smart contracts that can self-verify their own conditions and self-execute.
