May 3, 2023

Reimagining Procurement with Digital Transformation in FY 2024

Reimagining Procurement with Digital Transformation in FY 2024

The COVID-19 pandemic, long-standing skilled labour shortages, and recent geopolitical developments have disrupted the global supply chain. As a result, companies are adopting various strategies to overcome these challenges. A recent McKinsey report(1) found that 67% of businesses have adopted digital tools for end-to-end supply chain visibility, making them twice as likely to avoid disruptions caused by early 2022 supply chain disruptions. Therefore, the digitisation of procurement is emerging as the most effective one for building resilient supply chains.

While more than 60% of companies have fully embraced digital transformation in procurement, others still face significant challenges in adopting and implementing digital tools. This digital divide is a significant issue that needs to be addressed in procurement functions. Let us take a closer look.

The Digital Divide: Analysing the Need-Gap in Procurement

Access to critical decision-support information such as production statuses, inventory levels, capacities, forecasts, KPIs, and more can be delayed when data is siloed and disconnected in procurement functions. Procurement functions still face challenges such as:

  • Fragmented and outdated processes
  • Poor data management
  • Inefficient supplier management
  • Lack of visibility into spend data

To overcome these barriers, procurement teams need to be more agile, efficient, and responsive to changes in the market by embracing digital transformation.

From Paper to Pixels: The Benefits of Digitising Your Procurement

Let us look at some of the beneficial impacts of digital transformation on procurement:

Automating Procurement Processes

  • Digitisation can help eliminate the manual, time-consuming tasks that procurement teams have daily, such as supplier onboarding, contract management, and purchase order processing. 
  • Automation can help reduce errors, increase speed, and free procurement professionals’ time to focus on more strategic tasks.

Improving Data Management

  • Digital transformation can help improve data management by providing real-time visibility into spend data. This visibility can help procurement teams identify trends, reduce costs, and negotiate better contracts with suppliers. 
  • By leveraging big data analytics and AI, procurement teams can gain insights into supplier performance, risk management, and compliance, enabling them to make data-driven decisions.

Enabling Efficient Supplier Management

Digitisation can help procurement teams manage supplier relationships more effectively by providing real-time insights into supplier performance, risk management, and compliance. This can help procurement teams optimise their supplier base, improve supplier performance, and reduce supplier risk.

The Future of Procurement is Digital: Join the Journey in FY 2024

The rise of digital transformation has elevated procurement from a tactical function to a strategic one, empowering procurement teams to generate value for their organisations. By leveraging technology, professionals can effectively tackle bottlenecks in the procurement process.

At Moglix, our tailored digital solutions are designed to streamline the entire procurement cycle. Download this case study to discover how we helped a major chemical company overcome supplier fragmentation, limited MRO purchase visibility, and procurement price variation challenges. Our solutions delivered an 85% reduction in processing of transactions, POs, and invoices and a 5% savings in procurement costs.

Contact us today to learn how we can help you digitally transform your procurement strategy.

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