Enterprise digital transformation has become a top priority for business leaders in the past year, according to researchers from The Hackett Group who are recommending five ways to best apply the concept to procurement organizations in a report released earlier this spring.
Digital transformation—the process of unleashing digital technologies to create new and enhance existing business capabilities, processes, and experiences that meet rapidly changing requirements, as the group describes it—can help companies achieve better business results faster, while streamlining operations. Many firms have accelerated this process over the past year to respond to pandemic-induced customer behavior changes and supply chain challenges.
“For many organizations, the business disruption triggered by the pandemic was a real digital wake-up call,” the researchers wrote in the report on Five Essential Digital Business Capabilities. “Out of sheer necessity, companies made massive changes in weeks–sometimes days–that otherwise would have taken months to plan and execute. Effectiveness of response was directly correlated with digital maturity or the ability to quickly employ technology to adapt the business model to new needs.”
Capitalizing on those efforts requires a focused strategy that can be adapted across the enterprise. The report identifies the following five digital business capabilities and accompanying “enabling technologies” for procurement:
Digital Engagement. Technologies include chatbots and intelligent agents, intelligent devices and omnichannel tools, data visualization and real-time analytics, and customer relationship management systems.
Digital Workforce and Organization. Technologies include knowledge management systems, virtual collaboration tools, cloud-based applications and data, and self-service analytics.
Digital Service Optimization. Technologies include supplier portals, cloud-based modern application platforms, robotic process automation (RPA) technology, supplier relationship management tools, and more.
Digital Ecosystem. Technologies include digital platforms such as e-sourcing and e-procurement, virtual collaboration and network tools, and Internet of Things technology.
Analytics-Driven Business Insight. Technologies include automated spend analytics, data visualization, master data management tools, machine learning, and smart data capture.
In addition to the five essential capabilities, the report also addresses how to prioritize investments in enabling technologies to deliver “speed to value,” presents a framework for successfully accelerating digital transformation, and offers four steps to fast-track the digital procurement journey.