ProcureTech’s CEO and founder answers the question
Similar to most other components of global industry, Procurement practices have been disrupted by evolving technology and new innovations. This opens the door for companies to pursue new ways of working and engage in new transformations. But is procurement technology behind other categories? 70% of companies are adopting technology that’s not achieving the desired outcome (Deloitte) therefore the speed of adoption of new technology is a troubled area.
“There is a significant opportunity for procurement to learn from the leaders not only in procurement, but also across other functions like sales, marketing and HR that are becoming digital at a faster pace.”
Lance Younger, CEO and Founder of ProcureTech
There are a number of challenges other than adoption speed, restricting how technology is being embraced e.g., traditional ones such as data quality. The two largest are the quality of digital leadership and the digital procurement vendor landscape. To overcome these issues, the culture and mindset around technology needs to change with technology being embraced as an opportunity, not a necessary evil. To be effective, the procurement function themselves embracing it is not enough, suppliers, stakeholders and the rest of the supply chain must embrace it too.
Although utilising technology is important, it is critical to first identify the problem before rushing into a solution, it allows a stronger business case to be developed and the best technology can be prioritised. As mentioned previously, although it is crucial for procurement to have a digital mindset, the vendors of these solutions are a fundamental part of the process and are often the ones accelerating change.
When looking to adopt a new vendor, organizations are no longer just looking at the obvious (price, quality, suitability etc) vendors are now examined for their ability to suit their basic requirements as well as provide a distinctive point of differentiation. There is also an increased focus on the impact a vendor has on the triple bottom line.
Selecting a vendor goes even deeper than that, the evolution of the relationship is also now a critical decision point, this is to ensure an ecosystem of solutions that can support procurement’s evolution.
Over the next 12 months, the impact of a number of macro trends will be seen (such as the pandemic, trade shifts etc). Although most businesses will focus on the short-term in order to develop their costs and resilience, digital solutions will be key catalysts in developing these areas.