Realizing the value of digital transformation: making procurement’s vision a reality

Digital transformation was a huge topic in 2022, and as we move through 2023, it’s a theme that we expect to play an increasingly influential and significant role in shaping procurement’s future.

It’s why we brought together some of the function’s brightest minds for a roundtable event in Amsterdam in early February, under the banner ‘Realising the value of digital transformation: making procurement’s vision a reality’.

The range of experiences when it comes to digital transformation, ensured the broadest mix of opinions and expertise were shared in an enlightening session which once again shone a light on just how mission-critical digital technology now is to procurement as it continues to establish itself as a strategic partner within the business.

The road is long

It was clear from the discussion that almost everyone involved was at a different starting point on their digital transformation journey – but, despite the various level of digital maturity within the room, there was a real sense of optimism that change was coming.

The consensus was that the key to success was embracing the challenge and appreciating there are no shortcuts, no silver bullets – just a need to maintain a belief in what digital transformation is capable of delivering.

“My big question is, how do I convert all those nice little initiatives, which people tend to like, to transform the behaviour of people in the department and ensure that digital is at the front of their minds?” says one attendee. “How do we go from all these digital initiatives to having a digital mindset in the organisation?”

Fundamental to that success is building collaborative partnerships with other functions and within the business.

“When procurement is working alone, in silos, on the different initiatives that they have, it’s very difficult for them to convince the rest of the organisation that this (digital transformation) makes sense,” says one senior figure. “It’s incredibly beneficial to have an end-to-end view. You see how to join those dots.”

Have faith in innovation

At the start of a transformation project, or hitting a road bump during the middle of one, can make the end goal, the North Star, as distant as ever. But help is at hand. You just have to know where to look.

As one procurement leader put it during the roundtable: “For every single need you have, there is always a solution or a startup out there, that can help you to cope with that challenge. Whether it’s coding the right spend, whether it’s classifying the spend. There is always a company with a fast solution that can drive ROI.

”The infrastructure around a digital project can be a decisive factor in whether that project will be a success or not. So, if the infrastructure isn’t right internally? Then why not look for the external solution described above?“

There are very interesting shortcuts you can take with technology nowadays that will enable your function quickly,” says one leading procurement figure.

Having a thorough business plan and a very clear view of what the company needs, though, is essential to ensuring that the partnerships you foster deliver exactly what procurement needs. Primarily, you need a solution that not only fits the vision of the function – but also aligns that vision with the goals and ambition of the company at large and is a fit for the challenge or opportunity you are addressing.

You have to bring the people with you

You can have the best digital infrastructure in global procurement, but if people aren’t empowered to use it and embrace it, then you’ll never get to your desired destination.

“Giving employees a say on where digitisation could and should be adopted is important,” says one participant.

A number of companies in our discussion had developed procurement academies, not all of which placed an emphasis on digital. But according to those sitting around the table, there is still a generational gap when it comes to digital, and a very pressing need to ensure that any digital solutions that are implemented are as intuitive and easy to use as possible.

And marrying technological skills with broad-based procurement competency, remains an issue, as one roundtable member explained.

“We started with a procurement technology department, average age of 23 or 25 – they were fluent in technology and would run projects for buyers.

“Then we would see the generational gap – they were fluent in technology but didn’t know anything about procurement. We are now moving from this centre of excellence model, more to disseminating technology into the operating model.”

Have a vision – and sell it well

Nothing sells a vision better than having those, who are a living and breathing part of the project, sell it for you. That’s particularly true when it comes to digital and ensuring the success or otherwise of any transformation.

One roundtable member summed it up perfectly.

“What establishes your organisation on the next level is if there’s an eventualisation about it,” he says “If you can get the people who are responsible for those small innovations speaking about it, it helps to establish (the organisation) at a certain level. But you need that vision.

“It also helps if the audience is incentivised.

”By this, he means, that if all of these small projects are successful, it’s essential that those who support them also understand that they too will be successful and get a promotion, or more budget, or serve customers better. In short, it means having digital champions that are passionate about the journey and passionate about telling the story.

A win-win in every sense.

Get the narrative right

Mindset, mindset, mindset. When it comes to transformation it’s essential that the messaging is right, particularly from those at the top of procurement. But it’s also critical that procurement sells its vision by telling the right story – one capable of capturing the imagination of everyone it needs onside.

“It’s important to connect to an existing story,” says one leading figure. “If there is a main story – whether that’s amazing customer experience or sustainability – you connect to that story, and always build it back to that strategic theme or direction. You can then say ’by the way, we need money for this, or for that. That’s how we’ve made transformations work. You need to know how to sell that story.”

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ABOUT DPW LABS

Innovation is at the heart of becoming future-ready. LABS is your strategic partner for modern procurement transformation and empowers progressive organisations to identify and execute collaborative innovation opportunities together with pioneering startups, scaleups and tech innovation experts from DPW. A part of DPW, the industry’s leading ecosystem for digital procurement, LABS has been helping enterprise companies worldwide expand their innovation ecosystem and emphasize emerging technologies.