Category Management digitisation is happening, but there's still a way to go
- Lizzie Black
- January 13, 2023
Digitisation is happening more and more across procurement and in all sectors.
Category Management (CatMan) is becoming more vital to business functions, but to what extent is the enterprise utilising technology?
A report by Future Purchasing focuses on the future purchasing category management operating model.
What is Category Management?
The report defines it as:
‘Category management is the strategic end-to-end process for managing categories of related supplier spend that aligns business goals and requirements with supply market capability. It transforms the long-term value achieved from an organisation’s total supplier spend and delivers a blend of value including improved service, reduced risk, lower cost, higher revenue and ultimately better organisational performance.’
Process & Technology: the results
Stakeholders want seamless, easy to use solutions, although the report uncovers CatMan still has a way to go regarding digitalisation. It appears AI is not being utilised in the positive way it could be.
Based on the 281 respondents, where 34% are category managers, survey results regarding digitalisation (question 5.6) show some of the lowest results. 46% of participants believe their category management process guides category teams to identify all available improvement. The lowest score in the entire survey revealed only 4% of Starters seek to digitise their CatMan process and toolkit using AI. Improvers is slightly more at 19%, followed by Leaders at 60%.
However, the diagram shows some of the lowest responses in the Process & Technology segment.
Some of the Leaders are successfully putting CatMan at the heart of the digitalisation process:
Britvic CatMan Case Study
“You could say we came from a zero base, because we had limited category management in place until a couple of years ago — and now it’s a number-one priority for procurement.”
Simon Mays, Transformation Director at Britvic, revealed how the company is utilising technology more to streamline and structure processes. CatMan has become a priority, where he shared that they have ‘turned digital’.
Technology has helped generate workflows and involve the right people at the right time, thus emphasising that whilst people may fear losing their jobs to automated tech, there is still a need for humans to help the solution in the first place.
Despite these findings, there are solutions paving the way, such as Supplier Management and Sourcing & Cost Management pioneers.
In brief, technology is evolving at a rapid rate, therefore we can only expect revolutionary Category Management solutions to improve the space in quick succession. It is likely its operating model will see digital change, but time will tell depending on investment in solutions and trust from managers trying to improve CatMan.
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