Digital Transformation of Procurement In 4 Basic Steps (NEW KNOWLEDGE NOTE)

Over the past few months, you have either read or heard me talk about the emergence of the new consultancy model and its impact on the successful digital transformation of procurement.

While providing a conceptual overview of the unique approach of “by procurement, for procurement” consultancies like Velocity is essential, I wanted to get into the specifics of what I call the Progressive Implementation Methodology.

The intent in doing this is to provide a better understanding of how and why “true” or dedicated procurement consultancies succeed where traditional general practitioner consultancy models (and methods) have fallen short.

In commissioning me to write this Knowledge Note, Velocity Procurement’s objective was to:

1. Obtain an unbiased third-party assessment of the need for a new, more dynamic implementation model to maximize industry success with digitally transforming procurement;

2. Assess the methodology by which said objective could be achieved.

Knowledge Note Abstract

The response to a Procurement Insights poll asking the question; “What is the most significant risk that procurement faces in 2020?” was telling in that the number one risk was not cyber-attacks, job security or supplier performance.

More than 40 percent of those who responded said that “digital strategy implementation” was the greatest risk procurement faces in 2020.

A Deloitte Global CPO survey which reports that “most companies that have fully implemented digital technologies are not satisfied with the results,” is further verification of the above poll results.

So, what is happening?

Given that we are – according to Gartner, in the postmodern ERP era, it would be reasonable to assume that the intuitive, user-friendly technology of the digital age would have removed the past barriers to successful procurement automation. The barriers which included low user adoption, long implementation timelines, and operational inefficiencies are no longer an issue.

Today’s digital technology, including RPA and AI, are amazing tools. However, the problem, unlike the past, is not with the tech – it is an implementation strategy and people resource problem.

No matter how “advanced” the technology may be, the methodology of developing and implementing a digital procurement strategy is crucial to success. What this means is that you must look beyond the technology to assess your organization’s digital readiness and align yourself with the right partners to realize your objectives.

In this Knowledge Note, I will provide a breakdown of what is known as the Progressive Implementation Methodology. Based on four key elements or building blocks, this methodology will overcome the slow digital adoption and unfavorable outcomes associated with traditional consulting methodologies.

30