Summary
There is no question that all transformation, across all functions of a business—from finance to procurement—must be digital.
As the business landscape changes, new crises emerge, and unforeseen challenges take over the environment, however—ensuring that your company’s operations are aligned consistently with these priorities is not a straightforward feat.
What does digital transformation mean for today’s business? A common flaw in the digital transformation efforts of many companies has been the use of new technologies to sustain old models of working. Digital technologies have evolved to the point where companies can leverage these tools to reframe their operations in more novel, future-focused ways.
Contemporary companies must take advantage of these opportunities to bring about the industry-leading transformation they are capable of.
How does purchasing transformation align with changing needs? From outsourcing to new technologies, the best way to reach for procurement success is evolving. But at the heart of these changes is a need to foster responsiveness and cater to stakeholders more effectively.
What the new priorities overtaking the landscape all promise is that companies need a long-term strategy to anchor their procurement value even as the economic environment changes. As procurement functions change to align with priorities like eco-consciousness and adopt new technologies, a flexible framework and the prioritisation of stakeholder relationships will support sustainable success.
Talking about technology in the contemporary business landscape feels like a double-edged sword. On the one hand, many companies turned to technology during the crisis to help them through the difficulties of the pandemic. On the other hand, innovation has slowed considerably as a result of most industries turning their attention to survival—instead of higher value-added goals—during this global period.
In the current predicament, identifying what a company requires to stay competitive is a challenge in itself. Actually implementing the best practices that can help your company get ahead of the competition is another hurdle altogether.
What all this means is that even while technology has changed the ease with which both microcosmic and macrocosmic entities have streamlined their operations and changed the way they work, finding the right balance between driving transformation and value creation is not always easy.
What does digital transformation mean for today’s business?
Changes to the digital business landscape have been, and continue to be, rapid.
While the general challenges all companies have faced have been obsolescence, inefficiencies, and the inability to reap the most value out of the systems they have put in place, the solution has never been to eradicate technology and move back to manual, traditional processes.
In fact, the way digital transformation is leveraged today is a side effect of how quickly the landscape has changed, making it difficult for any company to keep up.
For contemporary procurement businesses, the transformation has become inseparable from the digital technologies taking over the procurement landscape. Digitisation, digitalisation, and digital transformation for procurement, however, takes three distinct forms.
While digitisation refers to the transfer of data to digital form, digitalisation takes this one step further. With digitalisation, companies account for the involvement of software and hardware innovations that can help them not just organise their data but leverage it to create value addition, efficiency, and make better, long-term decisions.
Given the rapidity with which technological innovation became an inseparable part of business success, companies often fell into the trap of only using these methods to make their manual processes faster. This meant that even though the world had changed drastically as analogue methods faded out of use, businesses were still mimicking these methods even as they switched to a more digital form.
This is where digital transformation emerges as a necessary next step in business optimisation.
With a digital transformation, companies raise questions about how they can alter their approach to carrying out core processes and functions and take advantage of new ways of reframing their operations to meet the changing needs of their stakeholders.
How does the digitalisation of procurement align with changing needs?
The success of any company’s procurement services has always been dependent on the responsiveness the organisation is able to foster towards market changes. Procurement involves a wide network of internal and external stakeholders, and the more segmented a procurement and supply chain becomes, the more complex these relationships can also get.
In order to stay competitive and ready for the challenges ahead, a company must build a long-term strategic framework for the procurement function that will help unlock the strategic value of the function; open the door to higher value-added opportunities; integrate the function with the other core functions of company operation, and help procurement professionals build on their skills and expertise in the field with the proper supports in place. In the wake of the crisis, a more resilient method of implementing the digitalisation of procurement has also become a necessity.
Contemporary priorities are focusing on eco-conscious and innovative methods, the quality of the human relationships a business is able to build, and the decision-making value the function is able to bring to the table as markers of procurement success.
For procurement functions across every industry, these changes mean that while technology will continue to disrupt purchasing methods and the possibilities for functional optimisation, companies cannot lose sight of the human value of the digitalisation of procurement.
Holding procurement steady in a volatile environment
Even as global priorities change at a breakneck pace, organisations are in need of stability for the sake of their stakeholders, operations, and strategic outlooks.
For this to be implemented in the long term, companies in Europe and beyond must embrace the technologies available to them. Swift decisions must also be made on how the digitalisation of procurement in Belgium and all across Europe can support EU priorities and global concerns.
Best practices may always change, but maintaining an integrated business structure that is responsive to rapid change and risk mitigation leads to a transformation that is both sustainable and focused on value addition.