Summary In the contemporary business environment, digital procurement is becoming increasingly popular and sought after by businesses around the world. The relationships …
Key components of a successful procurement digital strategy
A digital strategy for procurement that aligns with the strategic goals and objectives of your company is vital in the digital age. Explore the key components that should be in your successful digital procurement strategy with insights from procurement specialists.
The global business landscape in 2023 is highly volatile as a result of geopolitical conflicts, supply chain disruptions, inflation, and the general economic downturn caused by the COVID-19 pandemic.
In such an environment, the procurement sector has turned towards technology to help transform its processes and enhance resilience with the aim of future-proofing its functions. Digital procurement tools have gained massive prominence in the post-pandemic business landscape, resulting in a surge in improved and highly standardised procurement activities.
A key contributor to this development is procurement digital strategy. Streamlining and digitalising procurement processes by itself is simply not enough in today’s highly competitive business environment. Procurement digital strategies allow businesses to set up a procurement function that aligns with the strategic goals of the business.
These end-to-end strategies create a highly value-added procurement function that takes the progress of the entire business into consideration, driving organisation-wide efficiency and growth.
However, to deliver these outcomes, procurement digital strategies must be organised with some key components in mind.
Key components of procurement digital strategy
Here are 10 key components that must be considered for a successful digital strategy for procurement.
Clear objectives and goals
First and foremost, a successful strategy for digital procurement requires specific goals and objectives. Your goals could be cost reduction, supplier relationship management, risk mitigation, or improving process efficiency.
Executive support and buy-in
Gaining the support of your organisation’s senior leadership and key decision-makers is vital for successful strategy execution. This will make strategic processes like decision-making much more streamlined and efficient.
Cross-functional support
Involving stakeholders across the organisation is also a critical aspect of a successful digital procurement strategy. Ensuring the participation of different departments like IT and finance will ensure alignment and cooperation.
Data and analytics
Data is king in the digital age. Leveraging data and analytics via business intelligence tools to gather insights, forecast demand, and make data-driven decisions is necessary for an effective procurement digital strategy.
Supplier management
Supplier relationship management (SRM) is a key concern for procurement professionals of today. Utilising digital tools for supplier evaluation, performance monitoring, and collaboration creates a healthy procurement process.
Procurement automation
Automation offers near-endless scalability and highly efficient procurement processes by allowing you to place low-value-added tasks on autopilot while procurement teams focus on more strategic and value-added activities.
Compliance and risk management
Managing risks and ensuring compliance is vital in any business. Digital strategies for monitoring and ensuring compliance with relevant regulations to mitigate procurement risks are essential for a successful digital strategy.
Training and skill development
Training and ongoing development of the skill levels within your procurement team on digital tools and technology usage to improve procurement processes is essential for a well-performing digital strategy for procurement.
Continuous improvement
Continuous improvement by regularly reviewing performance metrics and adjusting the strategy as needed is necessary to ensure procurement strategies remain updated and in line with the latest market trends and economic conditions.
Scalability and flexibility
Training and ongoing development of the skill levels within your procurement team on digital tools and technology usage to improve procurement processes is essential for a well-performing digital strategy for procurement.
Establish and perfect your procurement digital strategy with Kronos Group
Kronos Group is a procurement consulting agency based in Europe. Our offices in Belgium, France, and Italy allow us to support a wide range of companies and industries with our globally-recognised consulting services.
Our procurement consultants are dedicated to helping you establish a future-proof procurement digital strategy, informed by the latest best practices and standards.
Our procurement consulting services include:
- Procurement maturity assessment
- Procurement excellence
- Procurement training
- Procurement BPO
- Spend optimisation
We have also recently partnered with Oxalys, a procurement software solution provider that offers ready-to-use procurement software for businesses of all sizes.
We offer industry-standard services for you to establish and perfect your digital strategy for procurement.
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FAQ
The digital transformation of procurement refers to the popular trend of businesses utilising digital technologies like procurement software and project management software to streamline their procurement processes, increasing efficiency across the organisation and driving exponential value.
The 4 key elements of a procurement strategy are strategy, process, people, and technology. The strategy involves setting clear objectives, the process involves supplier selection, people involves supplier relationship management, and technology involves using technology to enhance the procurement process.
The 4 main areas of digital transformation are process transformation, business model transformation, model transformation, and organisational digital transformation. Each of these areas involves automation and transformation in various aspects for an overall more efficient and effective business process.
