Procurement contradictions: ambition and reality
Digitalization, Procurement Trends, E-procurement
OpusCapita has a very simple purpose statement. Our purpose it to digitalize global trade, one customer at a time. Now, you might find that to be slightly contradictory and if so, you wouldn’t be alone. 'Digitalising global trade' – wow, that's no small thing and OpusCapita is just one company? And 'one customer at a time' just seems slightly too slow to match the ambition of digitalizing global trade. Well, we are perfectly happy with the contradiction as it represents just what you think – a highly ambitious company and a pragmatic one. The 2019 Procurecon Report holds similar contradictions and that makes it an interesting read.
Everyone knows procurement is all about cost savings (the top benefit selected) but did you know procurement is also seeking growth as a key benefit (the second most important benefit)? Are growth and savings at odds? They could simply be conflicting goals representing two sides of the same (procurement) coin but importantly, they surely represent a growing perception of the true value a world-class procurement function can provide. Almost 20% of respondents also sighted ‘time-to-market’ as a key benefit. What does time-to-market represent except a commitment to customers and customer service – this is something our customers are repeatedly telling us, specifically, that procurement automation is a means to improving their ability to serve their customers well.
If the main benefits sought are cost reduction an growth, what are the main challenges holding organizations back? This year budget seems hard to secure (45% find it a challenge) but as we are talking about contradictions, it seems there is a lot of new technology piloting going on right now. Perhaps this means budgeting for tactical technology experimentation is easier than say – a broad new procurement platform. This year we see organizations combining social media, big data, the IoT (internet of things) and AI (among other technologies) into their procurement platforms. It’s even possible that bundling new tech, isn’t always about procurement directly but in the case of CSR (corporate social responsibility), social media may well play a critical part as a data source for tracking positive/ negative trends (with AI) and staying ahead of potentially damaging PR.
The elements discussed above are all about contradictions within the report – in essence, the difference between ambition and reality. It’s healthy, it makes sense and with a broad-based survey such as Procurecon 2019, it’s not surprising to see a wide variety of interests. However, there was one area in the survey that emerged as the one thing all could agree on as THE place where leaders can separate from the laggards. The connection between suppliers, onboarding, information management, catalog management, performance management, and sourcing, together represent the upstream process elements within procurement, which are all linked and jointly provide the biggest challenges and yet, yield the most sought after results.
As you read this report, ask yourself the following questions: How easy is it to onboard a new supplier and integrate its catalog into your corporate shop? What self-service tools do you offer your suppliers to ensure your vendor data is current and useful in sourcing. What supplier performance can you measure and are you able to leverage this within your sourcing efforts. Lastly, how integrated and automated are all of these elements? For the reader of this report, we hope you have both the ambition and the pragmatism to see the opportunities of world-class procurement AND to realize them. Digitalising global trade is our purpose and your procurement department has its own purpose. We want you to be equally ambitious in your goals and if you stay focused on fundamentals, we feel confident you will reach them.
Rowan has more than 10 years of experience in the purchase-to-pay arena. During this time, he has managed the go-to-market for a diverse set of portfolios including Accounts Payable Automation, B2B Networks, Financing Services, eProcurement and Product Information Management.
Read more blog posts about Digitalization
How can e-Invoicing save the world?
25 - 05 - 2020
We all have been the witnesses for a new phenomenon in the modern world. Like a scenario from a fictional movie has become reality.
Reflections from my trip to Singapore
12 - 12 - 2019
Let’s start by why I went to Singapore? There was an Exchange Summit. And on top of that also OpenPeppol had its Management Committee meeting.
What’s going on in e-invoicing
21 - 11 - 2019
In this blog we will take a look at India, who is making a move towards the clearance model for e-invoicing. And then we will take a closer look at the Hybrid Invoices.