Reinventing the procurement role in the digital age

Procurement 4.0
May 15th, 2018
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From a new value proposition to the intelligent and shared use of supplier data, from current use of available tools to the integration of new talent: Procurement 4.0 is now under way.  

The digital revolution in the industry is prompting people from every role to reconsider the way in which they work and even their position within the company. Clearly the procurement role is no exception. These changes are redefining approaches and creating real breakthroughs which can be used.

PwC has put forward a well-researched perspective that provides an in-depth analysis of the disruptive impact of digital innovations, as reported by 235 procurement managers from European industrial companies.

The main ideas are detailed below:

Procurement 4.0: providing a framework to digitise procurement

Although the move to digital has undoubtedly begun in the area of procurement, for most European companies, the digitisation of procurement is still far from being the focus of a documented strategy. While 19% of respondents say that they "have started taking action to digitise strategic processes", and 35% say that they are "digitising transactional processes", 60% do not think that the initiative will succeed on a strategic level for five years.

Procurement 4.0: enhancing the buyer's data

43% of European industrial buyers consider "the poor quality of information" to be the greatest challenge, even more so than developing the skills to be able to exploit this information. Procurement officers liaise between suppliers, key influencers and customers, and are responsible for adding value to the vast amounts of data that they possess. The challenge for Procurement 4.0 is to provide the reasoning needed to speed up the alignment of customer expectations with supplier innovations, especially those from start-ups, on an industrial scale. The real-time integration of all the data from the value chain will therefore enable companies to be increasingly agile and reactive. 

Procurement 4.0: new contractual approaches

The digitisation of procurement has far-reaching consequences in terms of the relationship with suppliers, some of which have yet to be thoroughly analysed. For example, the extension of the value chain, which has proven to be beneficial in terms of quality and responding quickly to customers, raises practical and legal issues regarding the ownership and protection of supplier data. The purpose of Procurement 4.0 is also to redefine the relationship with suppliers, especially in terms of assessing risks and sharing value. 

The prospect of integrating supplier data into every level of the process, places procurement officers in a strategic position. Procurement 4.0 offers a defined and demanding methodological framework to help buyers make the most of the opportunities that the digital revolution has to offer. Good luck with your transformation!