Help, digitalisation is coming - how is it going in purchasing?
In every company we encounter the big word "digitalisation" - it hovers over all departments like a sword of Damocles, ready to fall down at any time. Purchasing is no exception. But how can we deal with the tension between digitalisation and the daily practice in purchasing? What are the starting points for digitalisation in purchasing and what mistakes are being made?
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Let's first take a look at what digitalisation is in the first place, because it is not a recent phenomenon. In principle, it is a simplification of work through an EDP process. For procurement, this ideally means it is faster and more effective, leaving more time for strategic issues. A look at the history of procurement shows that even the Egyptians brought about a simplification of work through the use of papyrus. A leap back in time to the 1950s reveals a reliable set-up of supply chains and in the 1990s the starting signal for digitalisation had finally been given - the first companies were online. Processes were mapped in PCs, floppy disks appeared on the market and we had fully arrived at the topic of digitalisation.
Digitisation and everyday work
Do you already have a Purchasing 4.0 or do you still have Excel spreadsheets and individual orders by mail? After all, the saying goes "never change a running system", right? But since Corona at the latest, no one can avoid the topic of digitalisation of purchasing processes. This further charges the tension between the big word digitalisation and the daily practice in purchasing. The other day, for example, a customer told me: "We can't worry about digitising structures and processes now. We have so much work." That is already the crux of the matter. The administrative activities that eat up time would be simplified by digital processes, but there is no time for digitisation - a perpetual motion machine is created. To get into a development, processes have to be sorted. This may be time-consuming and unpleasant at the moment, but digitalisation offers an opportunity here. Nevertheless, digitalisation should not be seen as a side project. Unfortunately, it is often the case in practice that the purchasing manager or group leader is sent off with the words: "We are now going to do a new project on the topic of digitalisation". In my opinion, this cannot be done casually. It is a complete and important project work that takes time. A close look at the processes and the interfaces, as well as the definition of guard rails, is crucial for both the purchasing department and the neighbouring departments - and it is not something that can just be done.
Making work easier through digitalisation in purchasing
Digitalisation should make the work of the operational buyer, who purchases indirect material, easier. The administrative activities can be passed on directly to the requisitioner by means of digitalisation. The person who has a need can thus take advantage of the opportunity and, for example, order directly from a supplier on an e-porcurement platform or in an e-catalogue. I work with many start-ups that now also provide sophisticated apps in which certain goods can be easily ordered online via various e-procurement portals. If such processes are established in purchasing, many time-consuming administrative tasks are eliminated.
First steps towards digitalisation
Many people think of artificial intelligence or the digitalisation of entire supply chains when they hear the word digitalisation. But it doesn't always have to be the big one; starting with small, manageable projects is also enormously helpful in demonstrating how digitalisation works and can be successfully implemented. For example, you can digitalise internal processes between departments or introduce e-invoicing. You can also consider digitally connecting the ordering system of your suppliers to your ERP system or your merchandise management system.
Advantages of Purchasing 4.0
The list of benefits brought by the digitalisation of purchasing includes a lower error rate, shorter lead times, more transparency and lower process costs. For several years, there has been talk about Purchasing 4.0, digitalisation and its benefits, but the reality reveals that many companies are still lagging behind. There are many challenges but no concrete solutions and so it remains as it is - far away from digital purchasing. Those who still work with yesterday's structures and processes will not achieve improved quality. However, technology alone does not offer added value - only when people work with it does digitalisation make a valuable contribution to value creation. A prerequisite for a successful digitalisation project is that the existing processes are analysed and designed and adapted for the future overall processes.
Get employees on board
Digitisation is also about getting employees on board and networking all actors with each other. Digitalisation creates "automated communication". In the cooperation, certain activities are stored in the process flows via workflows for those involved, so that they can be processed together - this is where effectiveness lies. Digitisation only works if everyone is willing to think outside the box. That means gaining an understanding of the overall process and designing their own process so that it fits into the neighbouring process. Without breaking down old structures, getting employees on board and improving purchasing competence, it won't work.
Do you also want to digitalise your purchasing and are facing challenges in the process? Let's master them together - I would be happy to support you in a personal exchange with clarity, structure and new approaches.