Over the last period, the role of procurement has transformed rapidly. The need to improve supply chain sustainability and affectivity and of course, to boost profitability mostly, has turned procurement into a vital part of the company that can save a lot of money.
The global COVID-19 pandemic has accelerated this trend and we can say that it has become a catalyst for digitally transforming procurement. Reinforcing the importance of procurement, as companies must adapt to the changing business environment at a great rate. New research from Ivalua1 shows that seven out often (70%) UK organizations say COVID-19 has increased the need for digital transformation in procurement.
The important step is to allow organizations to create a global view of what is happening in the supply chain in real-time. This will allow decisions to be made on how to mitigate the impact of the pandemic, on the supply chain. For example, when organizations need to quickly find new suppliers to ensure continuity of supply, the ability to act quickly is very important. We can say that this is critical.
Procurement is slowly taking more of a leading role in companies. New skills are required to include more technical and analytical capabilities. The same applies to technology, which is increasingly critical. Now, the procurement department must ensure it has the right tools that are easy to use in hands of the right people, with the right skills to use new technologies effectively. Currently, this is not happening. Employees need to improve digital literacy, especially those in functions including sourcing, procurement, and supply chain management.
Firstly, businesses need to recognize this growing need for digital skills and start finding ways to plug the gap in procurement. However, despite most companies recognizing the shift to digital skills, many are struggling to close the gaps in procurement. The finding shows that a shortage of digitally savvy talent (31%) and a lack of training for technical and soft skills (28%) are the biggest barriers facing UK businesses trying to develop digital skills within procurement.2
However, finding accompanying skills can be difficult. Recently, more and more entrepreneurs are worried that current procurement teams will have trouble working with new technologies. For many, it is challenging to hire people with the right digital skills that can work with new technologies. Businesses need to think beyond technology adoption to make the digital transformation of procurement.
This situation needs to change. Failure to up skill and attract new digital talent, will quickly see businesses fall behind competitors, lose market share and struggle to identify supplier risk ahead of time.
Procurement has been considered a digital laggard, but businesses need to ensure that procurement professionals have the means to keep up and add value. Therefore, companies need to focus on easy-to-use tools to make them more accessible to existing employees. However, they must also ensure that these tools provide sufficient flexibility to change priorities and requirements to ensure that they do not become barriers rather than activators.
Smart procurement can also reduce strain on employees by automating simple tasks to free up capacity for other improvements. The global pandemic has proved that organizations which have taken steps to adopt easy-to-use tools, have responded better to the unpredictable and changing environment. Those that don’t invest in the right tools, risk being left behind by more digitally advanced competitors, losing market share and missing opportunities to save money and innovate. In the wake of increasing uncertainty after COVID-19, these capabilities are vital, helping businesses to improve strategic decision making and navigate risk as supply chains become more complex.
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