The Sourcing Industry Group held its third and final day of its 59th SIG Global Executive Summit on Thursday, where professionals came together to network and learn about trends happening in procurement.
Topics covered in the final day included sourcing, reshoring, diversity in the contingent workforce, cost savings and risk.
In this post, we’ll focus on one session about digital transformation and one on procurement tips for start-up companies.
Digital transformation is not a lost cause … All you need are a few simple steps
Digital transformation has been a part of procurement for decades. It’s not new, but it can be a headache for many people.
In a session titled “Whatever Happened to Digital Procurement Transformation?,” two GEP representatives — Vipin Gupta, a senior consulting manager, and Amol Jagfale, an associate director of global delivery — made the case for companies to reinvest in digital transformation initiatives.
Gupta said that COVID-19 did halt many companies’ digital transformation efforts since the pandemic forced companies to solely focus on “keeping the lights on.” However, digital transformation will come back, possibly even stronger.
About half of vendors are using blockchain or artificial intelligence, according to Gupta. At the end of 2019, digital transformation dominated organizational priorities, and digital transformation’s capabilities to manage projects in this pandemic has shown how companies can continue to find value in the process.
Digital transformation has failed in the past because of rigidity, lack of end-to-end view of supply chains, limited integrations, and decreased innovation and collaboration.
However, GEP advises a six-step process to ease some of the challenges to digital transformation:
- Clearly define intended transformation objectives, goals and outcomes
- Define metrics to measure progress toward key goals
- Build the right procurement organization and provide them ownership
- Select digital tools and partners as per business requirements
- Collaboration, stakeholder and program management
- Transformation before (and with) digitization
A SIG digital transformation session from SAP and a procurement business consultant will be featured Monday on Spend Matters.
Procurement has a place in start-up businesses
While many start-ups may think of procurement as something of a headache or a money waste, the SIG Summit session “Sourcing and Procurement Success for Start-ups: Low Effort for Large Savings with Welltok” made the case for start-ups to use procurement.
Lud Hrovat, the director of procurement for Welltok, said procurement is low effort but equals large savings for start-ups.
“Many start-ups waste money for actually having a lack of procurement, having poorly designed contracts and perceived low-buying power. It’s a common issue when you’re just starting out,” Hrovat said.
He tried to dispel common myths and empower start-ups to choose procurement with simple steps. Hrovat’s steps include:
- Define who can sign agreements or approve spending
- Be clear that procurement must validate/approve the value of each deal
- Clearly state what competitive bids/events are required at a certain threshold
- Define what contractual business terms are standard for your company
Hrovat’s best piece of advice for start-ups trying to add procurement to their organizations? Multiply yourself. This process includes delegating and teaching others in your organization how to communicate needs to vendors or suppliers.
He also said start-ups should always keep it competitive. Companies should always keep a second option in their back pocket to get the best deal. “Never settle for less than a mutual win,” Hrovat said.