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Ep 04 Inside Procurement: Digital procurement podcast
‘Digital Procurement’ is the hot new buzz phrase and everyone is talking about it. There are promises – “digital procurement will transform your team and how you work with your stakeholders” – and there are threats – “digital procurement will eliminate the procurement department within 20 years”. These extreme remarks have inevitably led to a lot of confusion, and certainly plenty of questions: What exactly is digital procurement anyway? Why is it important? How do I take advantage of it? Do I need a “digital strategy”?
To understand digital procurement, it is extremely important to first understand the difference between digitisation, digitalisation and digital transformation. There are a number of theories regarding these three terms which has resulted in lot of ambiguity regarding them. Digitisation is the conversion from analogue to digital. Digitalisation is the application of digital technologies while digital transformation is where we transform a business to become deeply customer focused and valuable to them. Collectively, digital procurement is about applying digital technologies across the entire procurement function. In simple words, it is about creating a digital-forward procurement model. Although digital can lead to some massive developments in the procurement space, it is still at a nascent stage which means there is still a lot to be done.
Developing digital strategies
To really understand how you can develop a successful digital strategy, you need to fulfil some basic requirements. This includes having access to sufficient and organised data; understanding if your organisation can afford and adapt new technologies; having access to right analytical skills and policies to support the digital strategy and most importantly having the support of senior stakeholders.
Is digital really the new future?
When thinking about going the digital way, it is important to also know the future of digital procurement and where it is headed. As technologies continue to evolve and leading-edge capabilities such as AI become more accessible, the opportunities to enhance procurement’s performance and business value will surge, so there is no question that digital should be a central part of the growth and transformation agenda for CPOs across the globe.
To hear more insights into the fundamentals of digital procurement, as well as questions and factors to keep in mind while developing digital strategies, listen to this podcast by Omer Abdullah, Managing Director, The Smart Cube.