Over the last year, 85% of mid-sized to large B2B buyers reported procuring more of their business needs online. The majority (96%) anticipate that their organizations will continue to do more purchasing online, even after pre-pandemic business functions resume.
The shift to increased e-procurement has the potential to create benefits for business buyers, such as operational improvements and more efficient cost management. But to fully realize those benefits, buyers might need to adopt purchasing technology that aligns with the organization’s digital transformation goals.
Procurement leaders now have an opportunity to drive strategy and digital resilience in their organizations. By aligning digital tools such as online purchasing, automation and real-time reporting with digital transformation efforts, operational efficiencies can be achieved across the entire business.
A recent report by Amazon Business on B2B E-commerce in Evolution, surveying buyers and sellers across the U.S., found that many procurement professionals are focused on cost containment in the year ahead. More than a third of buyers cited reducing costs among their top procurement priorities. While last year’s focus was on adjusting to the changes the pandemic created for businesses of all sizes, facilitating a more resilient future is now top of mind.
Many buyers are looking for ways to optimize costs, boost productivity, and streamline purchasing activities. Their number-one self-reported priority for 2021 is increasing efficiency in the procurement department. Integrated digital solutions can help achieve this goal. Document storage and sharing, approval workflows, mobile applications, expense management and enhanced security protocols not only benefit procurement; they also improve effectiveness across the organization.
The pandemic underscored the usefulness of such tools. Businesses that were further along in their digital transformation journeys before the shift to remote operations were better able to adjust, maintain operations, and ultimately gain more market share.
Now, more organizations are investing in digital systems that help maximize operational efficiencies and develop resiliency. These technologies enable procurement teams to focus on value-add activities such as strategy, rather than time-consuming manual processes.
The desire to reduce procurement costs and realize greater efficiencies is driving the increased adoption of digital purchasing tools. But championing e-procurement systems doesn’t just affect the purchasing team. The entire business can benefit from improved operational effectiveness, helping the organization to become more agile and competitive. Following are three steps to guide transformation efforts.
Develop a digital transformation roadmap. According to a study from Harvard Business Review, only 24% of procurement functions reap the full value of digital tools. Technology adoption that lacks a strategic vision won’t transform how your department functions. A transformation roadmap can help to fully realize the benefits that digital tools offer.
Companies should first establish clear objectives and outcomes aligned with the larger organization’s goals. This will prevent transformation efforts from occurring in silos. A roadmap should identify your current maturity level and detail a multi-year execution plan to get the business where you want it to be.
Empower your buyers. Eliminating overcomplicated approval workflows, paper invoices, manual data entry, and other outdated processes will give you back time and budget. As you undertake your digital transformation effort, look for channels with features that provide consumer-like purchasing capabilities.
A commanding majority of buyers (91%) prefer e-procurement over traditional buying routines. They cite enhanced product range, competitive prices and order speed as the top benefits. E-procurement channels with guided buying features, multi-user accounts, and the ability to set spending limits enable buyers to be more independent and efficient, without going over budget.
Lean on reporting and analytics. Data and analytics can help you make better purchasing decisions and increase organizational agility, so you’ll want to look for e-procurement channels that offer visibility into purchase history.
Analytics capabilities help to identify purchasing trends, streamline reconciliation, and identify opportunities to optimize spend, such as supplier consolidation, bulk purchasing and tax exemptions. Additionally, real-time tracking helps the organization manage investments in certified or sustainable businesses to meet diversity or sustainability goals.
Ultimately, digital transformation can help procurement teams contain costs, develop efficiencies and build digital resiliency across their organizations. With the time saved through these efficiencies, buyers can focus on contributing to overarching business goals, such as supplier diversification and opportunities for innovation. As technology evolves, procurement change champions can foster long-term transformation and continued growth for their organizations.
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