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Seizing the Opportunity for Digitizing Procurement
Omer Abdullah |
December 20, 2023 |

 13,729 total views

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Multiple developments in supply chain technology are converging to create an unprecedented digital opportunity for procurement professionals. By mastering and combining emerging and maturing technologies in strategic ways, procurement teams are in a position to reshape how they work, and create value across the supply chain.

The most impactful opportunities for transforming procurement through technology fall into five broad categories:

 

Realizing value through generative AI and machine learning. 

This is the most significant and widely discussed trend that’s currently influencing the digital procurement landscape. AI and machine learning excel in recognizing patterns and making predictions based on historical trends and data. The resulting models and capabilities are becoming increasingly dependable, allowing teams to take confident action based on them.

While procurement teams have had access to substantial amounts of data for years, the challenge historically has been how to convert the most pertinent and highest-quality information into valuable insights at the point of use. AI is bridging this gap by identifying and extracting meaning from relevant data sources, allowing procurement experts to concentrate their efforts on core competencies.

 

Illuminating concealed processes through cognification. 

This is the process of enhancing the intelligence of objects or systems through digital connectivity and integration. In procurement, the rise of sensors and connected technologies throughout the supply chain has primarily driven cognification. As sensors and intelligent processes produce substantial amounts of data within the supply chain, procurement teams acquire the enhanced capability to identify potential supply issues, improve efficiency, and promote overall enterprise sustainability.

Cognification helps generate the requisite amount of reliable data that’s required to power AI and other insight-generation technologies. Without it, teams may struggle to gain full value from other emerging digital trends.

 

Accelerating workflow and insight through automation. 

In procurement, automation is being applied through several methods. Teams can adopt it for basic and routine tasks such as purchase order and invoice management, freeing them up to spend more time and attention on creating business value.

Experts can build automated data and insight pipelines that quickly put market, category and supply chain insights into the right hands, so that teams can respond to emerging trends earlier. Automation can also help streamline governance and apply new rules of procurement decision-making that support compliance and help businesses achieve strategic goals.

 

Adopting ecosystem thinking to enhance data. 

This has brought about a significant transformation in how procurement collaborates with both internal business units and external partners. By developing their digital capabilities in the form of composable ecosystems, teams make themselves easier to work with. This approach helps to establish mutually beneficial partnerships between procurement teams and supply chain partners, both upstream and downstream. Through a connected procurement ecosystem, organizations can augment their insights with data generated by those external partners, leading to a more comprehensive understanding of conditions, threats and opportunities.

Internally, ecosystem thinking helps procurement professionals to construct interconnected catalogs of digital capabilities for their respective teams. These “marketplaces” allow for independent access to key models and insights.

 

Enabling content personalization through contextualized insights. 

Procurement encompasses a variety of roles, each with distinct objectives and duties. Chief procurement officers, category managers, sourcing managers and contract managers draw on similar data sources to make decisions. However, their specific requirements vary significantly.

Content personalization allows procurement professionals to access specific insights and data in the manner that suits them best. They can easily contextualize information for specific audiences, addressing the longstanding challenge of transforming insights into prompt action.

By utilizing these digital opportunities, procurement teams can spend more time creating value and making strategic decisions for their stakeholders, while staying ahead of the digital curve.

Author: Omer Abdullah

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