How is Digital Transformation Changing Procurement?

How is Digital Transformation Changing Procurement?

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Digital transformation is the hot topic in modern business strategy right now.

Driven forward by the COVID-19 outbreak and the subsequent need to support business processes through technology, organisations across the world are currently putting a major focus on digital transformation strategy. Data shows that global adoption of digital transformation processes saw an acceleration so significant that 7 years of progress and digital growth was achieved over a period of just a few months at the end of 2020.

With digital transformation becoming so widespread, the practice is beginning to permeate every facet of business. Procurement, an essential part of any organisation’s supply chain process, has been one such area to see rapid development.

A process that has notoriously lagged behind others in terms of catching up with available digital technology and industry demands, procurement departments are finally starting to see the love and attention they deserve through digital transformation initiatives.

Today we take a closer look at the digital transformation process and what it means for procurement.

Digital Transformation

Defining Digital Transformation

Digital transformation is the process of upgrading, improving or introducing business processes and experiences through the integration and development of digital technologies.

The basic idea behind digital transformation is to make business activities more effective, efficient and productive by utilising an ever-growing catalogue of digital assets and tools. Digital transformation can be introduced across many different tasks within a business, including the procurement process.

Digital transformation involves removing old and outdated legacy systems or manual, non-digital processes and replacing them with the latest digital solutions. The replacement of the archaic measures, replacing them instead with newer and better options, is where the transformative nature of digital transformation comes from.

How is Digital Transformation Changing Procurement?

Digital transformation in procurement is all about data.

Data management, data access, data monitoring, data analysis, and pure and simple data availability. Great procurement strategy is all about data. Understanding markets, available suppliers, creating plans and strategies based on trends and demands, finding opportunities to grow and expand and achieve more with less; data helps shape better procurement strategy and digital transformation helps companies collect such data.

Experts agree that the emergence of digital transformation in procurement all comes down to changing the way data is accessed and used to empower the decision-making processes within procurement and, as a result, improving the way procurement is managed and executed. From automating supplier data handling for processes such as onboarding to creating data visibility across the entire supply chain, this is where businesses will see the biggest changes.

An Example of How Digital Transformation is Changing Procurement

An example of digital transformation in procurement is the use of Market Dojo eSourcing software to empower supplier onboarding, build strategic relationships and optimise tender negotiations.

Traditional practice for sourcing supplier bids for a contract tender includes collecting quotations, proposals and questionnaires, collating them and defining the most attractive bidders for the opportunity. Through outdated practices, this can involve a myriad of files, documents, folders and spreadsheets, which is inefficient both in terms of time and management costs, and by making it very easy for procurement teams to miss details or to achieve a truly valuable comparison of available supplier options.

With Market Dojo solutions for sourcing and eProcurement, procurement teams collect all relevant information for tenders through a single and centralised online dashboard, which allows for bids to easily be compared, ranked and monitored.

This kind of digital transformation does three things for a procurement team:

  • It simplifies the procurement process and makes it easier to understand
  • It cuts down on overall procurement expenses and administration time
  • It ensures all relevant data is readily available so teams can make smart decisions. 

Without digital transformation through solutions like Market Dojo, these benefits do not exist and procurement teams are working on under-optimised processes that — while potentially effective enough — are not providing them with the best and most valuable opportunities. 

How Can You Introduce Digital Transformation to Your Procurement Process?

There is currently strong availability across the procurement process when it comes to technology that can empower and optimise your procurement activities. Digital transformation in this area is certainly not hampered by technology or service options, but instead a lack of investment and interest from businesses with procurement initiatives.

But now there is a real need to change – to maintain a competitive advantage – and many businesses are rising to this challenge. They are actively seeking digital transformation in procurement. If you’re one of those businesses, you don’t need to develop or create technology to improve your procurement strategy, but instead introduce services and systems already in place.

eSourcing is an essential tool for digital transformation in procurement. It helps run tenders and set up digital auctions for online negotiation and ensures that procurement teams can harvest all the essential data they need to stay on top of their supplier acquisition projects.

Market Dojo eSourcing and supplier engagement tools offer a full range of procurement-supporting solutions, including eAuction setup, supplier management tools, procurement collaboration systems and supplier onboarding optimisation software. These kinds of tools and software services are ideal for any business looking to improve digital transformation in procurement.

Market Dojo offers reliable, dynamic and cost-effective digital transformation tools for procurement and sourcing teams. Discover our award-winning, flexible and on-demand software services available right now on our monthly subscription package without contract.

July 2, 2021

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