Top 10: Benefits of Digitalising Your Procurement Function

With the ongoing technical revolution, the digitalisation of procurement is of paramount importance to organisations looking to remain at the forefront of their sectors.

Especially as, now more than ever, companies faced an array of pressures, with procurement expected to be one of the central drivers of success for organisations and success. The environment could not be more challenging, with increasing pressure to reduce costs, improve efficiency and maintain competitive advantage.

There is where the benefits of digitalisation of the procurement processes comes in. From automating routine tasks to enabling data-driven decision-making, digital procurement technologies are revolutionising how organisations manage their supply chains and vendor relationships. 

Procurement Magazine takes a look at the top ten benefits of procurement digitalisation, demonstrating why it is of critical importance.

10. Scalability and flexibility 

For procurement teams, being able to adjust on the turn of a dime is vital, that is where digitalisation can help – offering unparalleled scalability and flexibility, allowing organisations to easily adapt to changing business needs. With these platforms, businesses can handle the increases, like translation volumes without significant resources being used.

In a moment, it can reconfigure to accommodate new processes, suppliers or markets. With a cloud-based solution offering particular flexibility, with access from anywhere along with easy integration with other systems. Digitalisation can give procurement to a platform to evolve alongside its business, thus supporting long-term organisational agility and success. 

Cloud-based procurement solutions, such as those offered by Oracle, SAP Ariba and Coupa Software, provide scalability and flexibility for organisations. These Software as a Service (SaaS) models allow companies to easily scale their procurement capabilities as needed and adapt to changing business requirements.

9. Competitive advantage 

Through digitalisation, procurement can get the upper hand on its competition. This can give organisations the chance to respond quickly to changes in the market, as well as capitalise on new opportunities.

It can give procurement the chance to onboard suppliers faster, make more agile sourcing strategies and enhance innovation through better collaboration with suppliers.

Digital offerings allowed procurement to be better connected with global markets more effectively, expanding their supplier base and accessing new sources of value. This increased efficiency along with cost savings through the use of digital platforms allows for better pricing or investment in product development – further boasting the competitive positioning.

SAP Ariba, a leading procurement software provider, offers solutions that help companies gain a competitive edge through improved spend management, strategic sourcing and supplier relationship management. Its cloud-based platform enables organisations to streamline operations and make more strategic procurement decisions.

8. Ethical sourcing and sustainability

Digitalisation enables organisations to better monitor and enforce ethical sourcing practices and sustainability initiatives.

It provides better visibility into supplier practices, allowing companies to track compliance with ethical and environmental standards. Digital tools facilitate the collection and analysis of data on suppliers' sustainability efforts, carbon footprints and labour practices.

This gives organisations the power to make more informed decisions on their supplier selection while giving suppliers motivation to improve their own performance. Digital procurement supports corporate social responsibility efforts and helps build more sustainable supply chains.

Capgemini and SAP have created a comprehensive sustainable procurement service to address the most challenging supply chain landscapes. This offer powers the inevitable transformation towards your sustainable business and is underpinned by science-based targets.

7. Supply chain resilience

Enhancing supply chain resilience is paramount, given the number of disruptions a procurement team can face. Through real-time visibility into supplier networks and potential disruptions, digitalisation enables organisations to quickly identify alternative suppliers, assess risks and implement contingency plans.

Advanced analytics help predict potential supply chain issues before they become a reality, while providing faster communication during a crisis and improving the flow of information, thus giving procurement the tools to make better decisions. This creates agile and resilient supply chains that can not only withstand disruption but also recover from it quickly.

SAP Business Network for Supply Chain solution enables trading partners and their customers to collaborate for transparency into a multi tier supply chain to help assure supply and on-time delivery, respond to disruption and drive sustainability and product quality.

6. Better collaboration and stakeholder engagement

Collaboration is at the very heart of procurement; the better teams collaborate with each other, the more likely they will find success in their work. Digital tools improve collaboration, both internally and with external stakeholders, by providing a centralised space for communication, document sharing and project management.

This allows for seamless interaction between procurement, finance, legal and other departments, as well as with suppliers. It leads to better alignment between procurement work and the overall objectives of the business—as well as faster decision-making. It also builds on effective supplier relationship management, thus leading to stronger partnerships and value creation.

JAGGAER ONE, a procurement platform, provides a single, integrated solution for spend management. This unified approach enhances collaboration across the procurement function and improves engagement with stakeholders by providing consistent visibility across all spend activities.

5. Improved risk management and compliance

While risks may be out of the hands of procurement teams, managing them effectively ensures organisations are in the best position to respond.

Digital tools provide real-time monitoring of supplier performance, automated alerts for contract expirations or violations and tracking of regulatory requirements. This gives businesses the chance to uncover and potentially mitigate risks proactively.

Digital systems also maintain audit trails, ensuring transparency and facilitating easier compliance with internal policies and external regulations. By centralising data and embedding standardised processes, these platforms can reduce the risk of fraud, errors and non-compliance, protecting the organisation from financial and reputational damage.

Oracle's Fusion Cloud Procurement suite helps customers improve their risk management and compliance efforts. The solution offers features for spend compliance and strategic sourcing, allowing procurement teams to better manage risks associated with suppliers and purchases.

4. Advanced analytics and data-driven insights

Data is the most important currency, allowing people to make informed decisions. Digital tools can harness large quantities of data and leverage it for strategic advantage, providing insights into spending patterns, supplier performance, market trends and operational efficiencies.

By harnessing this data, organisations can make more informed decisions, uncover areas for improvement and predict future trends. This analytical capability brings procurement to the forefront of business strategic thinking.

Data is the most important currency, allowing people to make informed decisions. Digital tools can harness large quantities of data and leverage it for strategic advantage, providing insights into spending patterns, supplier performance, market trends and operational efficiencies.

By harnessing this data, organisations can make more informed decisions, uncover areas for improvement and predict future trends. This analytical capability brings procurement to the forefront of business strategic thinking.

GEP Smart, a source-to-pay platform, utilises AI and cloud technologies to help organisations like Walgreens Boots Alliance transform their procurement operations. The platform offers advanced analytics capabilities for spend analysis and savings tracking, enabling data-driven decision-making.

3. Cost reduction

One of procurement's core functions is reducing costs, from renegotiating contracts to finding new suppliers. Digitalisation can become a significant aid in assisting that push. From reducing manual errors to eliminating paper-based processes and optimising inventory management, digital tools enable better spend analysis, helping identify cost-saving opportunities and negotiate better deals with suppliers.

Automated processes reduce administrative costs and free up staff for more strategic tasks, while improved data analytics allow for more accurate demand forecasting, reducing overstock situations and associated costs.

Amazon Business offer a suite of tolls to help with cost reduction. Including budget management, which streamlines the process of setting and reviewing time-bound budgets across an organisation.

This allows business customers to set spend thresholds and make budget amounts visible to buyers to get ahead of overspending.

Amazon Business is helping leaders to actively manage their budgets, including real-time tracking and usage reports, notifications when a budget is about to expire, pre-purchase approvals and an option to create one purchase order (PO) instead of multiple, manual orders.

Empowering procurement buyers to make informed purchasing decisions for their organisation while reducing the amount of time leaders spend auditing their purchases.

2. Enhanced transparency and visibility

Digitalisation in procurement brings unprecedented levels of transparency and visibility to the entire procurement process.

This enhanced clarity allows organisations to track and monitor every step of the procurement cycle in real-time, from requisition to payment. Such visibility enables procurement teams to identify bottlenecks, inefficiencies and potential risks quickly.

Furthermore, digital platforms provide a centralised repository for all procurement-related data, making it easier to access and analyse information about suppliers, contracts and spending patterns. This comprehensive view helps in making more informed decisions, improving negotiation strategies and identifying opportunities for cost savings or process improvements.

Increased transparency also fosters trust among stakeholders, including suppliers, internal departments and management. It facilitates better communication, reduces the likelihood of fraud or unethical practices and ensures compliance with regulatory requirements.

Ultimately, enhanced transparency and visibility lead to more strategic procurement practices, better risk management and improved overall business performance.

Basware, a procurement software company, offers solutions that provide 100% visibility across suppliers and spend for their clients. By automating the procure-to-pay process, Basware helps organisations gain complete transparency in their procurement operations.

1. Increased efficiency

Digitalisation significantly boosts efficiency in procurement by automating time-consuming, repetitive tasks that traditionally require manual intervention.

This automation extends to various aspects of the procurement process, including purchase order creation, invoice processing and contract management. By reducing human error and speeding up these processes, organisations can reallocate their human resources to more strategic, value-adding activities.

Moreover, digital procurement systems enable real-time data updates and seamless information flow across different departments, eliminating bottlenecks and reducing lead times.

This enhanced speed and accuracy in procurement operations leads to faster order fulfilment, improved supplier relationships and, ultimately, increased customer satisfaction. The ability to quickly adapt to changing market conditions and internal demands also contributes to overall organisational agility.

Coupa has been recognised as a Leader in The Forrester Wave: Collaborative Supply Networks, Q4 2024, for its strength in enabling supplier collaboration.

In Forrester’s detailed assessment, Coupa emerged as a standout performer, particularly in criteria focused on demand fulfilment, intelligent order management and AI-driven supply network optimisation.

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