The frantic pace of today’s do-better-with-less business environment is old news to procurement executives. They grapple with this new normal every day, acutely aware of the need for agility and speed. In fact, 84 percent of procurement organizations think digital transformation will fundamentally change how their services are delivered in the near future.
Yet just 25 percent are confident they have the right resources and competencies now to make this a reality.
This readiness gap is driving a critical question for procurement organizations. Leaders are asking: “Should we develop digital procurement capabilities internally, or should we work with a partner?” I think of this as the great make-versus-buy debate.
Make: Going it Alone
The “make mindset” is a common-sense approach. However, it has a fundamental flaw. The hard truth is that most procurement organizations don’t have the capacity, capability and capital funding to do this right. Companies are directing any scant resources they might have toward the pivot to digital in the front office—exploring new markets, developing new business models, and more.
Procurement organizations are also fighting a losing battle against the pace of innovation. Things change so fast that companies that actually find a way to invest risk getting stuck with technology that is out-of-date even a year later. In the digital world, the better mouse trap is always just around the corner.
Even companies that have selected cloud-based e-procurement solutions are struggling to keep pace. While it’s great that these providers offer new and emerging capabilities for the enterprise, offering and implementing are two very different things.
Whenever a new capability is released, Procurement should assess benefits and impacts fast. This is key for the rapid-fire ROI the business demands. But procurement organizations are not hard wired for this. Add to that the quantity and complexity of tools, vendors and categories of spend that should be addressed. The key takeaway? While software vendors provide future-forward capabilities, many procurement organizations are not taking full advantage of them.
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By: Kristin Ruehle
Global Procurement Business Process Services Offering Lead - Accenture Operations
