With decision-makers embracing new technologies and organisations focusing on quality and cost-cutting, procurement transformation has become a necessity. It is only then that procurement will change from a reactive internal department to a strategic function that ensures a competitive edge to the business.
Here are a few steps that organisations and CPOs can adopt to bring about seamless procurement transformation.
Digitisation is a must
CPOs should not shy away from digitisation. Artificial intelligence, machine learning and blockchain are revolutionising procurement. Many naysayers fear digitisation due to the learning curve and loss of jobs. While roles will change and possibly some roles will be eliminated, automation allows procurement to become more effective, efficient and innovative.
Managing supply risks
Supply chains are extremely complex nowadays. That is why procurement should have a thorough understanding of existing and potential suppliers and their supply chains. It may sound like a tall order, but analysing them will allow you to find out issues and deficiencies so that you can take corrective measures before there is a short supply or problem with your supplier and their supply chains.
Data is king
Procurement should make use of analytics and technology to generate data so that it can be analysed. It will enable you to find out where issues are with your suppliers, costs, supply chains and other aspects of procurement. Thorough analysis helps you negotiate better with suppliers when the need arises.
Procurement is ideally positioned to embrace new technologies and become flexible and versatile. By accepting technologies, procurement can become more agile and respond to the demands of internal stakeholders in quick time. Just make sure that the technologies add value to the procurement function and help you in unforeseen situations.
Have the right procurement processes in place
Check for maverick spend and off-contract purchases and put a stop to them by centralising procurement. When you focus on making procurement a pleasurable experience for internal stakeholders, they will not resort to maverick spend. The right processes will also make procurement more efficient.
These are some steps that CPOs can take to bring about procurement transformation in their organisations.