The impact of digitalisation on Procurement | KPMG | NL

The impact of digitalisation on Procurement

The impact of digitalisation on Procurement

The 4th Industrial Revolution is right at our doorstep! Still, many procurement organisations do not know how to react. And how could they know? Some technologies are still in such an early phase that it is impossible to predict how they will impact our procurement organisations, especially when considering the exponential pace of technology development.

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Thorough research and sparkling conversations can help us go a long way. Last year, a study conducted by KPMG and a futurist triggered one of the leading global companies in procurement, Vodafone, to think about which opportunities would arise from this so called revolution by digitalization.

Implementing sourcing excellence

Vodafone already implemented sourcing excellence (i.e. spend analytics, e-sourcing, P2P and others) in 2008. In 2015 Vodafone established procurement as a profit centre and realized a white label procurement company for third parties. Most of Vodafone’s tactical and operational procurement processes are digitized and these tools are becoming more and more advanced. But what would be next?

From savings to market insights

During a CPO round table organized by KPMG on November 15th, the chairman of the Vodafone procurement company stated that procurement should change our currency from “savings” to “market insights” if procurement wants to stay a value contributor to a company. That is why Vodafone invested in the digitalization of the strategic process, which is the real value adding process of procurement. Managing this process will turn the procurement organisation into an ‘information powerhouse’, enabling the CPO to have data sovereignty and giving him the position with knowledge to lead the supply chain both in -and outside the company.

Procurement 365 Digital

As a result, Vodafone, Microsoft and KPMG collaborated to create the “Procurement 365 Digital” platform. This collaborative and open platform focuses on the strategic procurement process. It enables all procurement professionals, located central or decentral, to create and maintain category strategies in an effective way. The platform combines, next to the professional expertise, artificial and network intelligence to organize, analyse, capture and maintain all relevant category data to manage the strategic process effectively. 

The next step in procurement maturity

To conclude, digitalisation opens up many opportunities for procurement and we recognize that much of procurement’s added value lies within the strategic sourcing processes. Therefore, focus on the value that procurement can add to your organisation and you will end up with Procurement 365 Digital to take a next step in procurement maturity. Still, no matter how state-of-the-art the platform is, it will not behave like a magic wand and spontaneously fix ineffective sourcing processes. But if you want to create tomorrow, it is often necessary to abandon yesterday.

For more information, watch the short video with Detlef Schultz and Michael Pleuger.

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