May 15, 2018

The Main Barriers to the Effective Application of Digital Technology in Procurement

I’ll be honest. I have copied this title, word for word, from page 34 of the Deloitte Global Chief Procurement Officer Survey 2018.

One page it may be, but, it is by far and away the most important one in relation to technology and the reason for this will soon become clear.

The report, is, as always, well put together and undoubtedly interesting. If your field is procurement then I’d recommend downloading it here. The same should be said of those who supply digital solutions. As there is plenty of evidence of this being a great case study on the dangers of getting too carried away in the face of external factors; such as shouty, shiny and shallow marketing as well as internally by short term targets. Actually taking a step back and considering the potential of digitising your processes holistically is the opportunity here.

In the report it is noted how important analytics will be.

‘Analytics will have the most impact on procurement in the next two years’

It also comments on the fact that the highest digital adoption can be found in P2P, sourcing and tactical buying.

This is all good and well. Yet, only a few more pages into the report you find that the two biggest barriers to the effective application of digital technology in procurement, by a long way, are these two bullet points:

  • 46% Lack of Data Integration
  • 45% Quality of Data

These are not small figures and the next barrier down is ‘limited stakeholder endorsement and prioritisation’ at 30% which is quite a drop.

The frustration here is that all of the aforementioned areas of digitalisation rely heavily on good quality data. For P2P vendors, it’s important that the data is clean and identical across all ERPs. For analytics, you need to be able to see all of your supplier information, 100% of it. Anything less and you are reporting inaccurately which can lead to poor decision making and so it continues.

Getting the data right at source means accuracy, it means easy integration and it means greatly improved efficiencies. Whether that be in the foundational onboarding or in the installation of a P2P/S2C system.

Let’s hope the next report shows that organisations around the world are building from the ground up. Promoting efficiency and flexibility in the long run.

As an aside, we will be publishing a white paper in the next couple of weeks which will touch on this. If you’d like to read it, please do join our newsletter or follow us on LinkedIn.

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