High-performing digital procurement and finance programs are essential for organizations of all sizes. When deployed properly, procurement teams can reduce purchasing costs by an average of 8 – 12% and deliver 2 – 3% in additional annual savings. Undergoing digital transformation in finance and procurement also adds immense value to the bottom line by creating hyper-efficiencies, maximizing productivity and increasing spend under management. Controllers are digitizing finance and accounts payable processes for scale and profitability.
But unlocking the full benefits of digital procure-to-pay processes can be a challenge if you don’t know where to start or who to turn to. To help, we’ve compiled 11 considerations and pieces of advice about procurement digital transformation from successful procurement and finance experts that will take your operations to the next level.
- “I believe we are on the cusp of more procurement organizations, beyond early adopters alone, realizing that the gains from better information far outweigh the costs of investment in specific technologies.” – Jason Busch, SpendMatters managing director on the importance of gathering the right data
- “The modern finance function is more than providing a report on what happened in the business. It is about helping sales, marketing, operations, and other functions run their business better.” – Brian Kalish, principal at Kalish Consulting on the CFO’s role in driving digital transformation
- “Transformation is hard. It is not for the weak at heart, because you get told no a zillion times, and you have to not translate that to an emotional failure, because it will eat you alive. You have to just believe, ‘okay, I have to keep talking about it’. They will come around, it’s just natural.” – Head of Indirect Procurement David Hearn on the importance of holding firm
- “The pandemic has accelerated the need for enterprises to become more digital. Working from home and the ability to remotely engage and transact with customers are at the forefront of this push. But enterprises must think beyond the concept that “digital” means “remote.” The post-pandemic business strategy of an enterprise must guide how it chooses digital initiatives to pursue. For example, enterprises forced to cut costs will focus on digital initiatives that improve productivity (for example, process automation).” – Gartner analysts Hung LeHong, Daniel Sun, Stephen Smith and Tomas Nielsen on identifying digital opportunities
- “In today’s era of volatility, there is no other way but to re-invent. The only sustainable advantage you can have over others is agility, that’s it. Because nothing else is sustainable, everything else you create, somebody else will replicate it.” – Jeff Bezos CEO and president of Amazon on shifting strategies
- “An increasing number of CFOs and other executives have made the realization that an operating environment that values cash, profit margins, and risk mitigation is one that plays to the primary skills and capabilities of a P2P operation. For enterprises striving for P2P excellence and for financial agility in its management of cash, collaboration between finance and procurement is now a requirement” – Andrew Bartolini, CPO Rising on the benefits of teamwork
- “The best finance people are those who can slot into the business – not disrupt it. They bring insights into problems. And, except in special situations, the budget shortfall isn’t their first topic when they walk into a meeting.” – Mary Driscoll, senior research fellow at APQC on the traits of top-performing CFOs
- “All we are doing is looking at the timeline, from the moment the customer gives us an order to the point when we collect the cash. And we are reducing the timeline by reducing the non-value adding wastes.” – Taiichi Ohno, father of Toyota Production System (TPS) on creating efficiencies
- “When digital transformation is done right, it’s like a caterpillar turning into a butterfly, but when done wrong, all you have is a really fast caterpillar.” – George Westerman, research scientist at MIT Sloan Initiative on finding success in the digital economy
- “Invest in simplicity and digital automation. If your employees can easily get the products and services they need, wherever, whenever, and without hassle, they will fully embrace your procurement program. Maximizing employee adoption is a critical lever for driving savings, increasing spend under management and creating bottom-line measurable value.” – Joe Fox, CEO of Vroozi on the power of digital automation
- “We tried to discern empirically what actions drove [this] outperformance and resilience and found many took through-cycle actions – moves that helped in the short term but also enabled an organization’s long-term strategy. It was a mindset of ‘we are not cutting costs but spending wisely’.” – McKinsey corporate finance expert Kapil Chandra on how CFOs can pivot toward resilience and returns
Wherever you are on your digital procurement and finance journey, the most important thing to remember is consistency will drive true change. Taking a multi-year phased approach, starting with a modern procure-to-pay system, will allow you to think differently, move quickly and achieve high ROI.
Find out how to be successful when selecting a procurement tech partner with our next blog: 10 Questions to Ask When Choosing a Procure-to-Pay Solution.
Are you ready for digital procurement transformation?
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