As we surpass the 9-month mark since COVID-19 first started impacting North America, now is the time for procurement … It’s a combination … Sectors representing about 80% of the economy have yet to benefit from digital technology. The second stage, development of a high-quality user interface, can now incorporate advanced tools covering spend intelligence, category analytics, clean sheets, category-specific content, eRFX, and tendering analytics. If information is power, the procurement function occupies an enviable strategic position, sitting at the confluence of the massive flows of information that run between a company and all its suppliers and partners. The true … Here is a summary of some of their most important advice around this topic: Digital transformation … The first requirement is the development of tools that support all of the main functionalities across the digital procurement landscape. Finally, a detailed automation assessment helps establish the potential automation possibilities using currently available technology. According to a McKinsey survey, chief procurement officers (CPOs) expect their digital procurement … Supply Chain Digital examines McKinsey’s report ‘Driving superior value through digital procurement.’ With the emergence of digital offering a plethora of new opportunities in procurement, it’s vital that CPOs choose the right transformation … If you would like information about this content we will be happy to work with you. The old paradigm of cost reduction and cost efficiency is drawing to a close. An alarmingly high percentage of nearly a third of respondents expect digital transformation … Unleash their potential. Unleash their potential. Procurement professionals can look at digital transformation as something that’s beyond their expertise, or they can embrace it. Please email us at: McKinsey Insights - Get our latest thinking on your iPhone, iPad, or Android device. Foster an ecosystem of innovation— accelerate the successful adoption of innovative technologies by exploiting co-investment or co-development partnerships with suppliers. However, as with any major change, it can be difficult to know how leaders should begin the capitalizing on this disruption. Organization and capabilities. Senior management of any company now demands from procurement. We use cookies essential for this site to function well. New operating models, … Following their introduction in the early 2000s, they … It leads to the creation of entirely new markets and businesses. Please try again later. Select topics and stay current with our latest insights. The pandemic has put the needs for these functions and skills in sharp relief. our use of cookies, and Driving superior value through digital procurement, McKinsey. Learn about It is clear that the first five elements of the framework — even if not all … To get the most from procurement digitization, leaders must raise their ambitions along with their skills. Invest in new talent and capabilities for your procurement function, and rethink the procurement career path to succeed in a digital world. What technologies should we be investing in? Today’s integration of procure-to-pay (P2P) processes with decision-making workflows and end-to-end automation positions Procurement at the crossroads of increasingly massive data flows. Join the largest conference of digital procurement leaders to discuss the latest in digital procurement transformation and technology this September ... Senior Partner McKinsey … analysis from a digital transformation performance study we conducted in 2017. There are major shifts taking place globally today to which procurement must respond: value chains are becoming more complex and volatile, with increased risks and opportunities that accompany that complexity; developments in digitization, automation, and analytics that can unlock previously untapped potential; and acceleration of technological advancements and innovations are now more difficult than ever to keep pace with without external partnerships. Traditionally, procurement has been the efficient workhorse for organizations, driving cost savings percentage point by percentage point, contract by contract. Many other industries are also experiencing significant upheavals due to the changing nature of trade relationships between the United States and other countries. It’s a combination … Digital transformation will help procurement departments improve how they operate and collaborate with internal and external stakeholders, allowing them to scale up or down quickly to respond to sudden supply challenges. The first requirement is the development of tools that support all of the main functionalities across the digital procurement … The Hackett Group found that digital transformation helps procurement organizations to optimize their processes, integrate with other systems and minimize error rates. But with so many options, which of the new digital … Aircraft-engine manufacturers, for example, are increasingly moving to power-by-the-hour service models that use IoT-linked sensors to collect real-time data on component conditions. Single pain points help organizations with all three drivers of digital transformation `` Accept '' to help leaders to... To decipher even poorly coded spend improve internal customer experience traditionally, procurement:... 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