At the end of the day money saved is money earned. This is even more valid for procurement and supply chain leaders. They are not only expected to reduce costs but also fuel innovation and future business growth.
It is easier said than done. While procurement functions have been at the forefront of most corporation transformation programs, there is an inability to access, interpret, and use the data to see the sustained value and ongoing insights.
IBM’s research has found that top-performing organizations tend to see value in the use of procurement analytics for activities such as better pricing and negotiations, identifying savings opportunities, improved demand management, and favorable long-term contracts with suppliers.
Digital Procurement and Spend Analytics
Machines are responsible for automating almost every process imaginable, from running simple tasks such as invoice processing and reconciliation to more sophisticated activities such as budget optimization and monitoring suppliers that are on the brink of bankruptcy.
Tracking products in the supply chain is becoming easier than ever while the cost of real-time tracking and authentication is reducing.
But despite digitalization, the procurement process in most companies is still largely manual and relies on decision-making without a comprehensive understanding of the data.
This means that they are missing out on the key benefits of digital transformation, including material cost savings of 5-10%, productivity increases of 30-50%, and improvements in innovation, quality, speed, and risk management.
According to a survey by the University of Mannheim, 83.9% of Chief Procurement Officers (CPOs) consider digitalization important to improve procurement performance, yet the adoption of digital technologies is anything from moderate to dismal.
“CEOs know they must accelerate the adoption of digital business and are seeking more direct digital routes to connect with their customers. But with an eye on future economic risks, they also want to be efficient and protect margins and cash flow.”
— David Groombridge, VP Analyst, Gartner
Despite knowing all the benefits, companies still face a lot of problems and resistance while implementing digital solutions. The reason is the complexity of the tech landscape which makes tech selection daunting.
Many different tools and applications can provide support throughout the procurement process. Some technologies are already in use and very much beneficial while others are still evolving. Some are not yet mature enough to be widely industrialized.
As a result, companies that dive straight into technology decisions may leave value on the table.
Make the Right Decision with UniAspect Digital
The need for quality components and services from suppliers is greater than ever for procurement teams across industries. Failures can result in increased costs - in the form of warranty claims, product recalls, and lawsuits - and damage revenue and branding irrevocably.
Digital technologies have the power to elevate the quality of procurement management to entirely new levels with greater accuracy. All due to big data, advanced analytics, artificial intelligence, and collaborative platforms. Businesses are now better able to anticipate and mitigate quality failures.
The advantages of going digital are substantial. By our estimates, tech-based solutions can reduce issues with procurement quality by 60% to 70%.
“Digital tools have transformed how companies do procurement and do business,” says Aligned Automation CEO Nitin Ahuja. “We are reaching a new phase in business strategy, where procurement is no longer simply an enabler of cost reduction. Rather, procurement has the opportunity to become a creator of competitive advantage.”
How UniAspect Digital Can Help?
As your digital partner, we help fulfill the critical expectations among organizations that the technology they adopt must be at least a 95% functional fit. We proceed with designing a custom strategy for your digital procurement and spending goals.
by planning manageable initiatives
- Planning strategy to tweak existing IT infrastructure e.g., infrastructure automation, migration to a cloud, and implementation of advanced data security mechanisms.
- Suggesting appropriate digital tools for new and/or existing procurement software and recommending advanced technologies (such as AI, ML, Blockchain, etc.) that can provide additional value to the procurement process
- Planning integration of procurement software with other business-critical systems (e.g., accounting software, inventory software, etc.), third-party tools and services as well as software of suppliers and business partners.
- Introducing personalized tech stack
project and for each separate initiative.
Benefits of Digital Procurement
As your digital partner, we help fulfill the critical expectations among organizations that the technology they adopt must be at least a 95% functional fit. We proceed with designing a custom strategy for your digital procurement and spending goals.
Business Sustainability
Digital procurements facilitate streamlining lower-cost operations by enhancing speed, efficiency, and control across all activities
Higher Spend Visibility
Real-time spend visibility reduces the overhead costs across direct and indirect material categories.
Risk Mitigation
Digital procurements facilitate the active monitoring of the supply chain as a result it becomes easier to assess financial and legal risks, risks related to KPIs, supplier profile, etc.
User Satisfaction
Digitalization leads to the automation of tedious tasks which enhances productivity and optimization of the P2P process
Informed Decision-Making
Advanced analytics provides detailed insights which lead to informed decision-making and effective management
Enhanced User Experience
Digital procurement focuses on an intuitive and consumer-centric environment which leads to enhanced user experience.
According to Gartner fewer than 1 in 4 procurement organizations have a long-term digital strategy. Many corporate functions are making strides when it comes to digitalization, but procurement is not one of them.
Procurement leaders who make smart digital investments get more out of them — a 76% improvement in the automation and analytics that drive spend visibility, execution speed, and compliance.
At UniAspect Digital we approach each digital strategy with the client’s business goal in mind and contemplate the economic feasibility of each initiative to ensure high ROI.
We aim to achieve positive financial outcomes rather than innovations for the sake of innovation. Contact us to discuss your concerns about digital procurement transformation.
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