While digital transformation of the procurement function has been on the agenda for some time, it’s now the top priority.

The problems that chief procurement officers are facing today aren’t going away any time soon, and the most effective way they can help their organizations to emerge unscathed from this economic turbulence is to invest in new technologies that will make their sourcing models and processes more agile and resilient.

Following are three key advantages to be realized from this long-overdue digitization of procurement.

Accomplishing more with less. Automation eliminates the need for human interaction on repetitive tasks like data entry, while machine learning and predictive analytics can help organizations streamline the data analysis and supplier identification process. When procurement moves to an inclusive, competitive and transparent sourcing model, it generates 60% to 70% productivity improvement, brings 30%-40% more spend under management, and delivers 10%-20% cost savings, which together leads to more than 20 times return on investment.

Increasing procurement’s strategic value. By taking over the brunt of the function’s manual work, digitization frees up employees to prioritize higher-value tasks, enabling procurement talent to become more than “number crunchers.” Instead, they can become business advisers and relationship managers, with a greater focus on strategic initiatives such as supplier collaboration, innovation and research and development.

The benefits of this are twofold. First, by removing mundane tasks from employees’ day-to-day jobs, digitization helps with both talent retention and attraction — key goals as procurement seeks to become a place where the brightest and best want to work. 

Second, elevating the role of procurement within an organization will help it earn that much-talked-about “seat at the table.” Procurement has long been considered a transactional, back-office function with little influence over board-level conversations and business strategy. But innovative digital solutions and platforms can free up teams to act as strategic partners to the wider business.

Building resilience for the future. If the past two years have shown us anything, it’s that organizations need to remain agile and flexible to survive the rapidly changing business environment. Procurement has a unique opportunity to lead company performance during unpredictable times, by employing innovative digital technology that allows both teams and business stakeholders to act upon valuable information and insights. Armed with this data, procurement teams can respond quickly and efficiently to meet future unexpected challenges and maintain a competitive edge. 

Forward-thinking CPOs are already adopting the cutting-edge technology that’s enabling their teams to operate in an agile fashion and navigate the current volatile economic landscape more effectively. By creating a new digital operating model that is designed to be user-friendly, intuitive and intelligent, organizations will bring more spend under procurement’s control, increase its ability to influence business outcomes, and help the company outperform its peers in today’s challenging environment.

Keith Hausmann is chief revenue officer with Globality.