Jul 10, 2021

Ivalua: How procurement can lead post COVID-19 recovery

Ivalua
covid-19
ProcurementTechnology
Procurement
Alex Saric, Smart Procurement ...
4 min
Alex Saric, Smart Procurement Expert at Ivalua weights in on how procurement can help organisations to get back on their feet post-COVID

COVID-19 caused unparalleled disruption to supply chains on a global scale. Almost overnight, procurement leaders were forced to rapidly adjust to keep their organisations running. However, despite these obstacles, many performed remarkably well.

For instance, procurement played a crucial role in the vaccine rollout, helping to rapidly accelerate production and deliver life-saving vaccines to millions of people. AstraZeneca made supplier collaboration an important part of its R&D process, as it worked with over 20 supply partners in more than 15 countries to enable the rapid manufacturing of its vaccines.

The role that procurement played last year has not gone unnoticed. The status of procurement has been further elevated, with 86 percent believing that it is playing an influential role in leading their organisation’s recovery from COVID-19. As executive leadership begins to widely recognise procurement, its next major role will be to help restore growth as business priorities shift back to the top line.

An uphill battle

Although more organisations now understand the need to ensure supply chain agility, improve decision making, and enable supplier collaboration – implementing this is easier said than done. Despite the critical role procurement played during the pandemic, it wasn’t easy for procurement teams, as COVID-19 exposed weaknesses in organisations’ procurement infrastructure.

Many leaders feel that their procurement strategies are being hampered by outdated technology. New research found that 72 percent of procurement decision-makers said that the disbursement of data throughout their organisation is hindering performance. Problems with data can also create inventory challenges, potentially leading to stock shortages and increased storage costs. If the wrong technology is used, or decisions are made in isolation, it can have serious implications. Poor technology choices make it more difficult for organisations to assess risks and opportunities, to ultimately build more resilient supply networks, and act on new revenue opportunities.

The pandemic has also highlighted the importance of closer collaboration with suppliers, both in responding to supply shocks and in acting on new opportunities. As a result, nearly two thirds of organisations have increased supplier collaboration as a key priority following the pandemic. However, working collaboratively is often complex and remains inefficient and limited to a handful of strategic suppliers at many organizations, with a lack of digitisation in procurement processes limiting progress.

Keeping the seat at the table

When applied correctly, technology can help procurement to evolve and meet strategic objectives. If procurement leaders want to keep their seat at the table in the long term, they must demonstrate that they still serve an important purpose as the organisation pivots from crisis to growth mode. This means implementing the right technology to support their procurement objectives.

Organisations should learn from their past mistakes, and look to smart procurement solutions to help them manage the data problems that caused challenges throughout the pandemic. They can capture data from the business, third parties, and suppliers, and link them together to provide a 360-degree view of everything that’s happening in the supply chain in near real-time. Armed with accurate data, procurement leaders can then make more informed decisions, improve supplier collaboration, and ensure the continuity of their supply chains.

Procurement technology platforms can also enable “collaboration at scale”, which will be invaluable in a post-pandemic world. More strategic objectives, whether unlocking supplier-led innovation or driving meaningful sustainability gains, require collaboration to succeed. Technology can address the core challenges, enabling better communication, secure sharing of information and ongoing monitoring of action plans. But it is key to digitize smartly. Collaboration does not start or end with a specific process so technology must support the full breadth of collaboration required with suppliers and other stakeholders. Equipped with the right tools, firms will be well-positioned to address both the current and future needs of their organizations.

A tipping point for procurement

The pandemic has been a key turning point for procurement. Procurement leaders stepped up to the mark, and helped to keep the lights on for their organisations even amidst major disruption. Executive leadership is increasingly recognising procurement’s role in restoring growth post-pandemic. Procurement leaders must drive ongoing transformation of the department, evolving the mindset and empowering staff with the right technology to facilitate improved visibility and collaboration. Now is the right time to reassess outdated technology.

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