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The announcement of Lockdown 3, although not unexpected, is a major setback to businesses just as they started to get back on their feet after a devastating 2020. The momentum they had built up in the last quarter has ground to a dead stop. Businesses must tediously start all over again. Welcome to Groundhog Day!

Businesses will be reflecting on the lessons learnt from Lockdown 1, in order to try and hit the ground running when we eventually exit No.3. Many businesses have had to reinvent themselves or introduce robust and aggressive new processes just to survive, let alone grow.

In the past year, businesses have struggled to manage expenditure with a background of falling sales and income. The pandemic has forced companies to reduce costs and consider smarter ways of operating. This has led to an acceleration of Digital Transformation across all business sectors at a phenomenal rate.

The adoption of digital technology to transform services or businesses, through replacing non-digital or manual procedures with digital processes or replacing older technology with newer, digital technology has seen an exponential growth.

Digital solutions enable efficiency using automation, but additionally, create new types of innovation, rather than simply enhancing and supporting traditional methods of business processing. Some of these technologies include Robotic Process Automation, (RPA) Artificial Intelligence (AI) and Augmented Reality (AR). The use of ‘Bots’ is changing the way many basic business functions are carried out. Embarking on digital transformation may seem like an intractable challenge as there is no standard blueprint or template. Each company is different and therefore requires an individually tailored digital plan.

What Can Be Done?

For a procurement function, digital transformation can bring unprecedented benefits in process improvement, time management, value for money and market engagement to name a few. While the absolute potential of digitalisation is still to be realised, many firms are exploring how value creation can be refined through the digitalisation of procurement.

Where procurement functions have already implemented change, the most common benefits deliver greater transparency and cost effectiveness.

Procurement professionals are uniquely placed to unleash the benefits that digitalisation can bring to their organisations through promoting the required cultural change towards innovative thinking. Value creation currently remains untapped for most procurement functions, which means that implementing change in this area will quickly create real value and bring significant benefits.

1. Define the specific requirements

Procurement Managers are in the best position to define the issues they face. They are uniquely placed to envisage the ideal end point, where many of the issues that take up time or create cost unnecessarily, are eliminated. Challenging the areas where improvements can be made enable the procurement process to be more efficient and will spark the ideas that generate viable digital transformation initiatives.

Once an idea has been created, it can be built on by assessing the value it could bring, and who would benefit. Ideas can be converted into an initiative that can be integrated into a wider company strategy.

2. Get the facts!

To help build tangible initiatives, Procurement Managers need to fully understand not just the daily activities and ‘pain points’ experienced within their team, but what tools are available to fix the issues.

Whilst some technologies, such as cloud computing and big data analytics, are becoming commonplace, technologies such as RPA and AI are not yet as well-understood or widely implemented.

Getting professional advice is a good way to understand emerging technologies, as is attending conferences and asking for training. Digital transformation awareness is growing rapidly and so these resources are becoming easier to locate.

3. Communicate

Sharing of best practice and lessons learned is key to success before and during the transformation process. As you learn, fail, challenge, make mistakes and achieve success, you must prioritise the sharing of information upwards as well as outwards with colleagues.

This involves not just reporting back to senior management on progress but catching up with peer groups to share insight. The benefits of this include faster development and reducing duplication of effort, but also increased motivation and trust.

Motivation must exist in any large change transformation project, but particularly in one where the end date is unspecified, and employees may struggle with the concept of evolutionary change (which augments their work with that of machines).

If colleagues can see that the transformation is having a positive impact on your team, they will feel motivated to achieve the same goal. This in turn builds trust across the company and is fundamental to digital transformation adoption and creating an augmented human/AI team that make better decisions combined than any one human or robot alone.

To embed technology to the depth required for these efficiencies, Procurement Managers must use communication and motivation to create a deep understanding of how the transformation will help them.

All too often, Auditel finds that many Procurement Managers are too insular and they ringfence themselves from the rapidly changing world of technology and will only put their heads above the parapet when mandated to make changes.

For further information on how your procurement processes and supply chain management can be improved by digital transformation, please contact Auditel. We can assist in this complex area and eliminate laborious, manual functions and speed up work processing, saving your company substantial sums of money.