You don't have to know much of anything about Procurement to recognize that digital transformation is on almost everyone's mind. New terms seem to enter the conversation every day. Robotic Process Automation, Blockchain, the Internet of Things, the list goes on and on.

Organizations are most definitely believing the hype. Hackett's recent CPO survey found that nearly every respondent expects digital solutions to transform the way their organization does business before the decade is out.

They certainly have the potential to do so, but organizations are mistaken if they believe these changes will just happen. They're also wrong if they expect transformation to look the same for every organization. In reality, the precise nature of Procurement's digital transformation will vary based on the function's resources and maturity

What could Digital Transformation mean for your company?


Whatever form they take, whatever solutions they lead your organization to embrace, digital transformations are really about one simple thing - introducing new ways to generate value. That's why organizations with purely tactical Procurement functions need to do some serious thinking before they can begin to pursue new technologies.

By allowing Procurement to reside in an obscure, tactical space these organizations are severely limiting opportunities for value generation. Before such companies can look into P2P platforms - even simple eSourcing suites - a fundamental cultural shift is in order. Leadership won't feel compelled to invest in Procurement's technology unless they've accepted the function itself as a strategic value generator. The promise of emerging tools is good fodder for building a business case, but the worst thing a Procurement unit can do here is get ahead of itself. They're ready, however, to take what is perhaps the most important step in any transformative initiative. They're ready to start changing the conversation.

Once the organization has agreed to provide for a more strategic Procurement function, then the conversation can shift to additional value a new tool might bring. 


Procurement teams at this stage have earned some of the buy-in necessary to begin acting strategically. Beyond looking for the best price, they're working to identify additional sources of value and understand the total cost of every dollar spent. They've begun to do this, but they're not fully there yet. At this stage, people will still do more to inspire a digital transformation than any tool will.

In all likelihood, an Operational Procurement function is still mostly concerned with ensuring deliveries arrive on-time, suppliers remain compliant, and contracts get renewed. While they look for opportunities to boost their internal clout, they should also begin to identify tools that will expedite these processes. By adopting tools that will eliminate (or reduce) Procurement's manual workload, they can free up time to engage in more strategic initiatives.

At this stage, a large investment is likely out of the question. Luckily for Procurement, there's a wealth of low-cost tools out there for eSourcing, contract management, and spend analysis. Leveraging any of these could enable Procurement to boost its efficiency and attract additional investments. 


Strategic Procurement teams are well-positioned to take a leading role in mapping out a digital transformation. Success will depend on leveraging their internal reputation effectively. By persuasively reporting on the impact of the tools they already employ, they can begin to build an argument for more advanced technologies.

Procurement's leaders should encourage a blend of skepticism and curiosity when it comes to new solutions. After all, this could be a 'make it or break it' stage for their department. While advocating for an effective investment could solidify their position as a strategic partner, a hasty or ill-informed suggestion could lead them to lose the trust they've worked so hard to establish.

Listening is as important - if not more so - for these Procurement units as acting. By listening to industry conversations as well as stakeholder, supplier, and customer expectations, they can start to lay out a plan for well-paced and effective transformation. 


This is where things start to get really interesting. A true Procurement innovator has the power and resources to stand at the vanguard when it comes to adopting emerging tools. By partnering with the right providers and cultivating the right internal environment, they could help make the speculation around digital technologies a reality.

They cannot afford, however, to forget the importance of the human element. Instead of looking for opportunities to replace existing processes and veteran employees, they should strive to encourage augmentation and evolution. Digital technologies will (eventually) change the shape of Procurement. For these organizations to see those changes through, they need to remember the importance of careful consideration and deliberate pacing.

Carrying out a successful digital transformation means navigating through the hype, honestly reflecting on Procurement's capabilities, and committing to a long-term initiative. At their most robust, these efforts are often multi-year, multi-million dollar undertakings. Even a best-in-class organization shouldn't risk going it alone. Reach out to Source One's digital transformation specialists today to learn more about what a digitized Procurement function could bring to your organization. 
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