Procurement in a Virtual Business World

Today, companies are undergoing a dramatic change in their environment and processes.  Many groups these changes together as “Digital Transformation,” but that industry buzzword fails to describe the essential details associated with this change.  A critical and often underappreciated area is procurement and supply chain management.

While these areas are not generally under the bright lights of business, these processes grind the gears of business success.  In building new service procurement processes and virtual supply chains, the Chief ProcurementOfficer must:

• Identify and adopt a framework for electronic procurement that uses virtual supply chains that incorporate existing state-of-the-art public and private sector electronic procurement and supply chain systems;
• Financial and acquisition changes designed to minimize capital expenditures while simultaneously maximizing operational expenditures
• Build and deploy electronic procurement system that uses virtual supply chains that incorporate multi-media, distributed work-flow management, document handling, and electronic contracting procedures;
• Educate and train users on new processes and systems associated with virtual supply chains and electronic procurement systems; and
• Build, extend and expand supply chain collaboration and electronic data exchange.

All this must also address the new and sometimes sweeping legal and regulatory requirements around data sovereignty and privacy.

Wedded at the hip with the CPO, the CIO must also find a path through “Digital Transformation.” The operational and deployment challenges faced there include:

• Prioritizing as-a-service information technology consumption and multi-source procurement
• Transitioning from data center ownership and physical management toward the virtual management of IT services delivered from third-party data centers;
• Dismantling of monolithic software application designs into modern solutions that aggregate internal and externally delivered microservices; and
• Retraining and transitioning staff away from Agile and Waterfall management models toward fully automated DevOps.

Taken together these activities start to describe the many details associated with acquisition and procurement in a virtual business world. Traditional and legacy management systems that comprised of disjointed point solutions cannot provide a holistic picture of the modern virtual supply chain and hybrid IT ecosystem. CIOs looking to blend legacy data centers with multi-vendor cloud solutions and CPOs striving to create higher value for the business by harnessing new and disruptive digital technologies must join together. This new age relationship must focus on delivering to the enterprise:

• A unified source-to-pay platform that can provide seamless information, process, and workflows; easy integration; improved data visibility and integrity; and increased compliance, utilization, and collaboration;
• The ability to leverage technologies like artificial intelligence, the blockchain, and robotic process automation (RPA) that can remove humans from repetitive or mundane tasks such as managing contracts, tracking expenditures, and assessing supplier performance; and
• An open, cloud-based procurement platform that enables rapid innovation while actively supporting the shift from cost control and spend management to value creation and enterprise growth.

When building such a relationship, digital procurement transformation tools provide the pathway to effective and efficient procurement in today’s virtual business world. Unified source-to-pay Platforms like SMART by GEP® feature AI-based analytics and automation suitable for complex enterprise supply chains. These advanced systems also work with enterprise resource planning systems such as SAP or Oracle.

Unified Source-to-Pay Platform to Enable and Accelerate Digital Procurement Transformation.

This post is brought to you by GEP and IDG. The views and opinions expressed herein are those of the author and do not necessarily represent the views and opinions of GEP.

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