In the era of digital transformation, supplier management and procurement came late. But over the past two years, companies have learned how vulnerable global supply chains are to disruption, making the digitisation of supplier management and procurement processes more important again. While cost reduction remains a priority, procurement needs to be more flexible and its strategy smarter.
A global survey by Harvard Business Review’s Analysis Services involving 271 participants reveals that organizations anticipate digital technology will help reduce costs, enhance efficiency, and improve data management. The participants, mainly senior executives from companies with 100 to over 10,000 employees across various industries, indicate a rise in digital technology investments. This year, 41% report increased spending, and 45% plan further increases next year. They expect these technologies to boost efficiency, cut costs, and refine data collection and analysis.
“Companies will find it increasingly challenging to stay competitive and agile if they persist with non-digital models,” said Jim Kilpatrick, Global Head of Supply Chain and Network Operations at Deloitte Consulting. “The future of supply chains is undeniably digital.”
However, the survey results strongly suggest that many organisations are not collecting enough data, or the right types of data. It’s a bit of a chicken and egg situation. Companies are hoping that digital will help them improve data collection and analysis, but if they’re not collecting the right data, the analysis probably won’t be very good or useful. On the other hand, those who take care to collect enough accurate data in the right categories will be able to use analytics to identify purchasing trends, which can help them achieve their organisation’s strategic objectives. Not only will they be able to quantify cost reductions, they will also be able to provide information that goes far beyond simple figures.
Source: Harvard Business School Publishing