To what extent is digitalisation being implemented across Procurement & Supply Chain?

Nadine Orhiere 09.09.2019

Digital transformation is well recognised as being hugely important to Supply Chain & Procurement, but just how is digital change being implemented in the sector?

How is digital change transforming the Procurement market?

Digitalisation and digital change have both been major topics of discussion that have been thoroughly covered across the Supply Chain & Procurement market, but to what extent are we seeing these changes being implemented?

Global source to pay cloud solutions leader, Ivalua, recently conducted a study involving “200 procurement, supply chain and finance professionals in firms with over 1000 employees” and found that over two thirds of businesses were still using dated and paper-based methods. As a result, these organisations tend to spend larger amounts (£1.94m) on staffing costs due to the administrative requirements. This money could be spent a lot more efficiently if digital methods were implemented.

“Digital transformation that hinges around technology, as opposed to the benefits and outcomes it will achieve for people, talent internally and customers externally, will almost certainly fail,” warned Ben Hart, founding Partner of transformation consultancy Atmosphere. “Fatigue can set in quickly when technology leads and people are expected to ‘get it’ without investment in new people-led skills, attitudes and behaviours for digital success.” - Consultancy.uk, 2019

Has Procurement been left behind in the digital revolution?

A significant amount of people questioned in the study felt their procurement departments were less technologically advanced than other departments within the business. It is commonly felt by these professionals that “this lack of digitalisation is holding them back in terms of working on more strategic tasks.'' Has the procurement department really been left behind in the digital revolution? 

“It’s imperative that organisations start their digital procurement journey now to ensure they’re not left behind in the race for competitive advantage.” - Accenture

You could argue that other change projects such as Brexit preparations could be what is causing the delay in digital change. Research carried out by PwC shows that “despite the Brexit preparations of large corporations taking top billing in the press, however, new analysis shows that IT and technology led transformation remains top of the agendafor these larger, blue-chip organisations. 

It’s important to commit to digital change within Procurement

To conclude, technology in the modern working world is constantly advancing and, with time, all organisations will need to commit to some form of digital change, especially within their procurement departments. Numerous studies have shown that not doing so will have effects on the business well beyond those just on the procurement department and could even have an effect on a company’s overall revenue due to efficiency being hindered. 

Nadine Orhiere's picture
Consultant | Supply Chain & Procurement Recruitment
norhiere@morganmckinley.co.uk