Jeremy Ferrer
Webinar :
Optimize your C-Class purchases and boost your results.
January
As we all know, the industrial revolution is coming to an end and giving way to The digital revolution. In recent years, the democratization of the use of IT tools and digital solutions has brought many changes, sometimes abrupt, into our lives, but not only that. It has also brought its share of upheavals in organizations. Old practices and processes are gradually disappearing in favor of new ways of working that are more efficient and faster. However, these are not without constraints. Like any revolution, The digital revolution is difficult to understand. At first, you feel lost. This is why it is important to take time to understand the changes that are taking place in order to anticipate them and adapt to the new challenges that are emerging. Like all departments within the company, the purchasing department is no exception to The technological revolution that is taking place. The question is: as a buyer, are you ready for the digital revolution in procurement? But first, let's start with Understand the digital revolution.
La digital revolution, also called technological revolution or digital revolution, is a term used to refer to the upheaval in our society caused by the rise of digital technologies, including computers and the Internet.
It involves connecting all people around the world through new modes of communication, including instant messaging, social networks, email, websites, etc. In addition, there is the processing and storage of very large data that could not be explored using traditional methods or tools. This technology is also called big data.
The digital revolution is also characterized by the rise of artificial intelligence and robotics.
When did the technological revolution start ?
The technological revolution began in the second half of the 20th century with the rise of computers. This was itself made possible thanks to the invention of the transistor in 1947. As early as the 1950s and 1960s, many governments and armies began using computers to process and store complex data. Mainstream use began in the late 1980s. It was also at this time that the first mobile phone appeared.
Another major turning point in The digital revolution is the introduction of the World Wide Web in 1992 and the appearance of the Internet in 1996. It is thanks to these two innovations that the digital revolution has become a global phenomenon. It has spread all over the world and in all sectors of activity. Starting in the 2010s, mobile communication became a communication standard. In fact, 70% of the world's population owns a mobile phone. They started using it to communicate, interact with other people, and get information.
The upheavals generated by The digital revolution seem to continue to accelerate with the optimization of computing power and data transfer speeds. So it seems that it is still far from over. It continues to grow and now affects all user profiles and sectors of activity. We're calling industrial digital revolution the digital revolution in the industrial sector.
The various functions within the company are also not immune to the impacts of technological revolution. That's how we talk about The digital revolution in procurement.
In the digital age or The digital revolution, all functions within the company are asked questions about their practices, their contribution to the performance of the company and their effectiveness. While digital transformation has already begun in most strategic business functions, support functions such as procurement are still slow to launch. It was only very late that they followed the trend.
Procurement managers understood the need to adapt their processes to the new situation, and especially to the constraints imposed by the health and economic context. The development of new technologies driven by digital revolution has made this transformation of the procurement function faster and more efficient.
The digitization of purchases is an extension of The digital revolution in all sectors of activity. This consists in applying the latest technologies, such as automation, big data, big data, the Internet of Things and artificial intelligence to the purchasing process in order to maximize value creation by the purchasing department and enable it to carry out its missions.
The digital shift, caused bythe technological revolution, is clearly initiated within the procurement function. New smart technologies and the development of Industry 4.0 have pushed this service to the heart of the company's performance potential. It has thus gone from being a guardian of cost control to one of the main levers for improving company performance.
The digital transformation of the procurement function is driven by two essential factors. First, procurement processes have evolved significantly, which calls into question the effectiveness of traditional tools. Second, the products themselves have also evolved. New technologies, including the cloud, artificial intelligence, artificial intelligence, robotics and connected objects, require adapted purchasing strategies. Hence the need to digitally transform procurement processes.
According to the results of the PwC E-Procurement 4.0 Study, 35% of Purchasing Managers said they had already started to digitize their processes. 19% said they had transformed their strategic processes. 60% expressed the wish to digitize their Purchasing function within 5 years.
The digital transformation of procurement processes concerns all sizes of companies. In recent years, a number of trends have been observed in the digitization of purchases, including the integration and real-time processing of data from suppliers, internal customers and distributors, the automation of processes via Sourcing-to-Pay or Procure-to-Pay, the use of artificial intelligence in collaborative tasks, the analysis of purchasing processes using business intelligence tools...
According to numerous studies, these trends will still have to be confirmed in the years to come. Blockchain, artificial intelligence, and process automation, which are the three components of The digital revolution, will have to take an even more important place within procurement departments.
The application Of the digital revolution in the procurement process has significant impacts on the performance of the procurement department in particular, and that of the company in general:
Reasons for the adoption of The digital revolution in businesses are essentially concerned with its practicality. By using software, like Sourcing Force, a number of tasks related to the purchasing process can be automated and completed more quickly and easily. This saves time and performance for the purchasing team.
As the process is automated, the risks of human error are also reduced. The team thus has better control over operational risks.
Innovative technological tools, within the framework of The digital revolution, optimize the purchasing process by simplifying and digitizing the most time-consuming and administrative tasks. This automation of the process allows procurement management teams to work in better conditions and to become more efficient. They will be able to participate actively and directly in the profitability of the company.
By being freed from tasks with low added value, they will be able to focus on actions that are more strategic and beneficial to the company.
In addition to the operational efficiency associated with process automation, procurement teams can also benefit from other benefits of the technological revolution, including better visualization of corporate data and better control of the supplier portfolio thanks to information updated in real time.
More and more businesses are aware of the usefulness of good procurement management to optimize their performance. Initially adopted by industrial companies, the digital transformation of purchasing now concerns SMEs and ETIs in all sectors of activity.
Businesses that adopt The digital revolution in their purchasing processes can benefit from a better return on investment on the expenses incurred for the digital transformation of purchases. By focusing on higher value-added tasks, procurement teams can improve their performance and gain a competitive edge. This allows the company to align itself in the face of the competition.
The actions required to ensure better procurement management are numerous and varied. The digital revolution has led to the emergence of numerous innovative tools, such as Procure-to-Pay, which make it possible to streamline these tasks, ranging from the simplest to the most complex and repetitive. These tools also include functionalities that facilitate collaborative work. They make it possible to automate the transmission of needs by internal customers and to shorten the validation circuit. By doing so, procurement teams save time and increase efficiency. They also allow Directorates-General to make the best decisions through better analysis and better data synthesis.
The use of innovative tools driven by The technological revolution thus increases the capabilities of the buyer. The elimination of repetitive tasks with low added value in favor of more strategic missions allows it to remain efficient and relevant in its missions. The use of Procur-to-Pay software, such as Sourcing Force, allows the buyer to collect more supplier data and to process it in a more relevant way.
A trio of consultants from PWC drew up the ins and outs of The industrial digital revolution — called “smart manufacturing”, or intelligent manufacturing — which is currently being played out in the industrial sector.
The trio outlines six elements of the digital revolution to consider:
Silos between departments will disappear, and Purchasing has a major role to play, as they have a privileged link with suppliers.
They can define new business models and transform themselves into a real profit center based on this knowledge.
They will be able to identify innovations to build products in more efficient and profitable conditions.
With the delicate question of ownership of the data collected.
Rather, the solutions will come from small specialized agile entities, with a focus on real-time Purchasing analytics in the areas of finance, customer and supplier relationships.
An innovative use of data: better know suppliers, markets, customers, better understand suppliers, markets, customers, predict trends, anticipate breakdowns... so many practical uses of data that you will have to know how to propose.
Is the digitization of Purchasing, the weapon of Buyers: increasing collaboration between departments, generating engagement, increasing the use of Purchasing analytics, an achievable dream?
The digitization of Purchasing impacts the entire supply chain from planning, through sourcing, to contractual negotiations, but is dependent on the maturity of the company.
Training efforts will be made, to allow Purchasing to free themselves from time-consuming tasks and to devote themselves to their core business.
New tools, new needs, new jobs: the digitalization of Purchasing leads to the need to rethink the organization in order to integrate new jobs in the face of this digital revolution.
But also to allocate resources to the most promising markets. A real challenge for the company: is it ready to decentralize its purchasing resources?
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