This article references content from Deloitte’s Global Chief Procurement Officer Survey published in February 2017. Their survey combined opinions of 480 CPOs from 36 counties across the world representing organizations with a combined turnover of $4.9 trillion. The full report is available here and is well worth reading.
For those that are focused on the digital agenda, I have pulled together some data points and quotes from Deloitte’s report that you may find of interest.
“Digital transformation will be a strong enabler for economic growth and productivity—reducing the operational procurement work, amplifying the strategic procurement work, and allowing resource investments to focus on higher value added activities.”
The objective of digital is to move people up the value curve.
With today’s digital applications Source to contract is becoming predictive, Purchase to pay is becoming automated, Supplier management is becoming proactive, and these are all empowered by analytics and strong operational management.
Procurement should consider the development of “always-on” digital supply networks (DSNs) which are tightly integrated and connect the traditional silos across the supply chain. These DSNs should provide for autonomous, real-time decision-making using a continuous flow of information; supplier, partner, and customer collaboration to link and synchronize; and data-driven optimization through use of prediction, visualisation, and artificial intelligence in everyday operations.
For those who are ready to reach for the stars, cognitive purchasing, machine learning, robotic process automation, blockchain, artificial intelligence, and even the translation of the digital to the physical (3D printing) are all readily available, and are ready today for deployment.
However, delivering tomorrows technology means addressing todays digital barriers—especially data quality and integration.
Addressing such foundational activities are often not understood by those going to market for the end solution who are typically focused on UX functionality.
So for those considering the purchase of procurement technology, please take a moment to read about the barriers to digital to ensure your shiny new app does not become the next while elephant in the organisation.
When Deloitte asked CPO’s “what are the main barriers to the effective application of digital”, their answers can be summarised as data, people, and systems.
Each of these are readily solvable in the right order, (which is not to purchase new tech, realise the data won’t support the outcomes, then blame people for poor adoption!).
When barriers to digital procurement are examined on a regional level the themes of data quality and integration are repeatedly cited as limiting factors. Why is this the case?
Because tech purchasers are so focused on the application outputs that insufficient attention and budget is allocated to the solution of available inputs. At HICX we see this in many RFP’s that come to us. We then have the task of client education during a purchasing process, which, at this point is perceived as scope creep. The desire to address foundational deficiencies in an end user solution is challenging to business sponsors when the message comes from the vendor.
Change the way you think about deploying digital. Here are three recommendations from the report.
HICX Solutions help the world’s largest and complex organizations digitize their supplier management activities. Save money, ensure compliance, and mitigate risk with HICX Solutions.