Digitalisation in Procurement
Procurement can be complex, particularly when you add digital procurement into the mix — not to mention new software and processes! However, the digital space has completely transformed how we view and use procurement in 2023.
This blog will break down what digital procurement is, how it works, its benefits and drawbacks and finally, where to find E-Procurement.
What is digitalisation in procurement?
Digitalisation in procurement refers to the implementation of automation, AI, analytics and other digital software and processes which boost efficiency, diversify supply management, and increase overall ROI.
This transformation of taking your procurement processes to the digital space can also be generally referred to as E-Procurement. However, E-Procurement really focuses on the software chosen to facilitate interactions and transactions between buyers and suppliers. These tend to be through purchase orders, invoices, and bid/tender platforms.
The New Age
As of 2023, digital procurement has become the rule, rather than the exception. The reality is, with the majority of businesses choosing to digitalise their procurement processes, keeping traditional procurement practices means your business will be left behind. Ultimately, digital procurement allows for the streamlining of operations which manual procurement simply cannot achieve.
This is why it is crucial to adapt to the modern digital age if you want your business to not only thrive, but also stand the test of time.
At Hudson, we can take a look at your organisation’s strategic and operational processes and provide you with a full health check. If you want to improve your procurement processes but don’t know how to go about it, we’re here to offer support!
How It Works
Digital procurement starts with an evaluation of your organisation’s current procurement processes and the identification of procurement technologies that would benefit your business.
Here are some examples of tools to consider:
- Spend Analysis: Spend visibility is vital to any organisation looking to drive greater value from their procurement strategies. You can understand your purchasing behaviour and prioritise where and when you spend to keep costs down.
- Procure-to-Pay: Procure-to-Pay processes help you keep track of your sourcing and procurement, requisitioning, ordering, receiving, payment, and accounting activities required to purchase goods and services. Overall, it ensures you are buying the right products at the right price.
- IoT (Internet of Things): Physical objects with digital technologies that exchange data using the internet (sensors, cameras, lights etc) provide traceability of products and help manage stock levels and efficiency.
See our blog on Construction Procurement Strategies to see how IoT works in practice!
- AI (Artificial Intelligence): AI does not replace human-led procurement processes, but merely helps diminish errors and risk. This occurs within processes such as strategic sourcing. If you are looking for a strategic sourcing consultant to help support you through this process, click here to see how we can help.
Benefits of Digitalisation in Procurement
Digital procurement comes with many benefits to your business, though you may only know them as saving you time and money! While this is the case, there are many more benefits to know. So, let’s cover them all:
- Reduce costs: digital procurement helps to automate processes which may otherwise result in human errors and accuracy issues. The fewer errors made; the less money spent on corrections!
- Flexibility: It comes as no surprise that using digital procurement frees up your team to focus on less time-consuming processes. Instead of manual record-keeping, automation technology allows for greater agility within your team and the digital procurement itself.
- Smooth Supply Chain Management: digital procurement helps to optimise your supply chain, by calculating purchasing patterns, recording stock levels, and identifying reliable suppliers.
- Visibility: Making digital procurement processes accessible to your team results in better decision-making and morale as they can see exactly how their procurement strategies are having a direct effect on the company’s growth — now and in the future.
Drawbacks of Digitalisation in Procurement
Even though digital procurement has advanced in 2023, no procurement process is ever flawless. While we believe that digital procurement has many benefits which far outweigh the disadvantages, it is still good to know the full picture:
- Slow Implementation: Without effective analysis of your current procurement processes and where you’d like your business to be in the future, you can run the risk of halting/slowing down the digital transformation of your procurement. It is, therefore, wise to hire a procurement consultant to help make this process run smoothly and offer valuable insight on efficiency.
- Supplier Onboarding: When implementing digital procurement, you must make sure that you are conscious of your current suppliers that may not be as technology savvy as your organisation. Therefore, take care not to disrupt any ongoing supplier relationships with your digital procurement transformation.
Where to Find E-Procurement?
At Hudson, we offer three procurement software options:
We house 11 dedicated tendering portals, where you can find the right suppliers for your business.
Simply create a ‘Buyer’ account and upload your specification.
Procure Smart (Coming soon)
Innovative technology to streamline and increase the transparency of your procurement processes.
Procure VLE (Coming soon)
Our procurement training platform is where you can learn all things procurement and become an expert!
More Information About Us!
Procure Consult
With Procure Consult, we offer support with tender management and ad-hoc procurement consultancy. Our expert team will manage the end-to-end procurement process or offer assistance at any stage, as and when required.
Procure Health Check
With Procure Health Check, we’ll conduct a full review of the strategic and operational procurement processes within your organisation. We’ll identify the areas that need improvement and help you drive greater value from the procurement process.
Procure Analyse
The purpose of Procure Analyse is to conduct a high-level analysis of your spending activity. We’ll help you understand your current purchasing behaviour and highlight areas that can deliver greater value. Procure Analyse is also offered as part of Procure Health Check or as a standalone service.
Procure Outsourcing
With Procure Outsourcing, we deliver a range of procurement solutions on an outsourced basis, completely bespoke to you. This can range from delivering multiple tender projects as a package to delivering the full procurement function of your organisation.
Get in touch for a consultation and find out how we can help your business drive better value from procurement.
