The do’s and don’ts of digitalization in sourcing
The digitalization of sourcing has been an ongoing trend for the past few years. Many organizations have already embarked on this journey, and there are others that are considering doing it.
The digitalization of sourcing is elevating businesses with more revenue and more value-producing opportunities. The benefits are enormous and include improved efficiency of operations, reduced costs and wastage, improved quality of services, better customer service delivery, and improved data analytics capabilities.
It is important to note that there are some challenges to consider when embarking on a digitalization journey, such as security concerns and a lack of skilled resources to operate digital systems, but these can be easily managed with proper planning and execution.
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What is the digitalization of sourcing?
The digitalization of sourcing is the process by which a company transitions from its traditional ways of sourcing to modern technologies. This transition can be challenging, but the benefits are worth it.
The Gartner IT glossary defines digitalization as:
The use of digital technologies to change a business model and provide new revenue and value-producing opportunities; it is the process of moving to a digital business.
Why embark on the digitalization journey?
There is now a need for more advanced tools because the world in which you operate is getting more complex. As supply chains have continued to increase in complexity, so too have the tools required to manage them. When your sourcing software is up-to-date, it can help you make better decisions. Digitalizing the sourcing process will increase communication, improve collaboration, and increase visibility and transparency.
The benefits of digitalizing your sourcing include:
- An increase in revenue thanks to faster response times from suppliers who are able to submit orders more quickly than before, thanks to automation.
- Ability to leverage sourcing data quickly, easily, and accurately. Instead of spending time and effort retrospectively and manually analyzing your sourcing data, simply click a button and run real-time reports on various metrics.
- Increased efficiency. Making your sourcing processes digital gives you more control over them and can help you get more out of them.
- The potential for human error in the data collection process is eradicated.
- Improved visibility into your supply chain, allowing you to make better decisions about how you spend your time and money.
- When sourcing processes are automated and streamlined, sourcing teams can speed up each project cycle time and ultimately increase their percentage of spend under management.
- Automation of repetitive tasks, allowing you to focus on strategic business decisions instead of getting bogged down by manual tasks.
- Increased internal and supplier compliance as digitalization achieves more structure, visibility, and control of daily activities.
Where should you start your digitalization journey?
The first step in your transition toward a more efficient and effective sourcing process is to evaluate your current processes and identify areas for improvement. Then, you can develop an actionable plan for implementing those improvements by choosing which technology solutions and which provider will best suit your needs and will help streamline those processes for you.
Accelerating digitalization in procurement comes down to a straightforward set of principles:
- Have a plan
- Make incremental progress
- Hold yourself, your team, and your leadership accountable
- Make adjustments as needed
- Proactively communicate with all involved
- Always think about what’s in it for your employees, your executive team, and your stakeholders
The do’s and don’ts
- Do make sure to get key stakeholders and users involved at an early stage.
- Do keep it simple.
- Do remember that technology alone is not the solution.
- Do maximize user adoption and throughput
- Do make it easy
- Don’t be too feature-centric
- Don’t try jumping across the stream in one go
- Don’t rely on system demos alone
- Don’t forget about selecting the right provider, as well as the right system
Don’t forget what you’ll be judged on:
- Does the system support and enhance processes?
- How quickly and well did the implementation go?
- How quick and successful was user onboarding?
- What is the level of throughput in the system?
- What was the return on investment?
Before you embark on your digitalization journey, here are some things to keep in mind:
- Establishing key metrics so you can start measuring and sharing success when the system is live will aid focus throughout the year.
- The digitalization journey does not happen overnight – it requires time and effort from everyone involved in your business.
- Make sure that everyone understands why they need to be involved in this process and how their role will benefit them as well as the company overall.
- Keep an open mind when making changes because there will be some bumps along the road (but don't let them get in your way).
How Unit4 can help streamline your sourcing processes
Digitalization is the new way of doing business. It is the future of sourcing. Unit4 Source-to-Contract by Scanmarket provides advanced functionalities in an effortless design. Originating from the needs of the end user, Unit4 Source-to-Contract by Scanmarket solution is attuned to meet the needs of the procurement professional. We take ownership of customer success with experts at your fingertips to drive user adoption. Digitalize your upstream procurement functions with technology that is built to be used.
Click here to read the whitepaper, read more on our website, or to book a demo.
