Digital Solutions for Procurement

June 8, 2021

The impact of digital transformation on business is ubiquitous. Drastic changes are afoot everywhere you look, driven by economic upheavals, the pursuit of competitive advantage and soaring consumer expectations.

Digital transformation has the power to drive the functional efficiencies and transparency that are essential to long-term success, as well as the personalization that consumers and business professionals now expect. Artificial intelligence, robotic process automation, big data, and predictive analytics are essential levers needed to stabilize and advance businesses during these disruptive times.

Our colleagues in procurement are strategic advisors who help their companies align with changing market conditions and business opportunities. In our discussions with procurement professionals across a variety of indirect spend categories, our Areka consultants report that common themes are emerging.

Following the disruption of 2020, top procurement priorities include a renewed focus on:

  • Reducing spend cost by leveraging innovative digital tools and business partner relationships
  • Mitigating supply risk to ensure continuity – using digital tools for transparency across the supply chain
  • Accelerating company-wide digital transformation with the change management needed for adoption of modern tools
  • Better aligning their own skills and talent to meet the changing needs of the business

The future of procurement in the digital age

Artificial intelligence, process automation, and big data are shaping the future of procurement. We’ve all experienced this truth in travel management. In Areka’s indirect practice, we see that this is equally true across nearly every category of indirect spend and in the practice of the procurement function itself.

With these capabilities, procurement professionals are arming decision-makers with the information they need to develop transparency across the organization, achieve spend cost reductions, and supply assurance — and in the end, to drive competitive advantage.

By automating end-to-end functions from procurement through to payment, organizations can finally create the kind of comprehensive data set that’s needed for the predictive insights that can be so powerful.

Equipped with transactional details, trends and information on consumer behavior and preferences, company managers now have the keys to entirely new superpowers. They can find opportunities to continuously improve strategies and tactics. They can streamline suppliers, take advantage of early discounts, spot out-of-policy or fraudulent activity, and a whole lot more.

Sourcing digital strategy

Digital transformation is impacting the entire procurement cycle for indirect categories. Travel is a great example of notable improvements that will yield results with the return to travel. Travel program marketing delivers just-in-time messages through online booking platforms, company communications tools and even email, aiming to instigate good buying decisions at the user level.

Relevant digital communications save travelers time and reduce confusion about important questions such as, “Is travel allowed to the destination I am considering?” and “Which preferred supplier(s) should I use?” or, “What do I need to do to comply with company and governmental restrictions?”

Now add in the power of personalization and the potential skyrockets. The advice delivered to me can now be based on my preferences and the options allowed by my company.  

How do we know we’re reaching the potential? By achieving lower trip friction as measured by the many opportunities for feedback in our more advanced digital world. Immediate opportunities to give user feedback are key, whether at the end of the TSA process, a supplier survey sent via text or an opportunity to give feedback in the travel platform app.

Suppliers acting on feedback quickly are able to shift from being reactive to proactive in addressing the customer’s feedback one off. But just as important is seeing patterns and acting more broadly. Goodbye, annual survey. Hello, frequent and simple feedback, using a variety of digital platforms.

Culture of transformation

The drive for digital transformation has intensified and is now essential for business success. But innovation and transformation don’t just happen. A recent survey by Harvard Business Review Analytics Services found that transformation requires a combination of:

1.    The right culture

2.    Revised business processes, and

3.    New technology

Text: The Harvard survey found that business leaders who've implemented policy and organizational changes designed to create a culture of transformation are twice as likely to say revenues have grown significantly as a result of digital transformation.

What does it take to transform? Having the right technology and modernized business processes are obviously essential. But perhaps the biggest challenge is having an effective people strategy — one that enables them to embrace change and move the organization forward. 

The study found that success remains elusive for many companies. 63% of the executives surveyed name cultural issues as the biggest barrier to transformation success. That’s up from 55% just two years ago.

This may be one of the most important new needs of business today, and procurement professionals are now looking at the opportunity this poses. Overseers of the procurement four-step process (strategy, evaluation, implementation, and optimization) know that the potential for pitfalls during implementation planning and execution is massive, just when culture, the sensibilities, capabilities, and needs of the consumer are paramount.

Transforming the procurement practice

Procurement as a function is undergoing a transformation of its own. Cloud, mobile, and touch technologies, as well as consumer-centric applications environments and unified digital platforms, will be the hallmarks of tomorrow’s procurement infrastructure.

The benefits for the procurement function are no different than those they seek as partners to the business: 

·   Ability to work faster and smarter

·   Lower-cost operations with process improvements

·   Increased capacity

·   More time for business advisory and value creation

Adopting modern digital strategies and tactics will allow procurement to sharpen their practice with greater efficiencies, powerful data, stronger business partnerships, and more effective communications.

See how Etta, powered by Deem, can help your business travel program.


Louise Miller
Managing Partner for the Americas, Areka Consulting

As Areka Consulting’s Managing Partner for the Americas, Louise leads global customer engagements including strategy, sourcing, implementation and optimization across many indirect categories including travel, payments, expense and events. Specialty areas include sustainability, leveraging the digital world, procurement, duty of care, policy and market landscape. Over the past 10 years, Areka has grown to be the largest independent firm focused on the buy-side. Louise and her family host international students from Latin America and Europe.

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