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CEVA Logistics
I.T Procurement Transformation and Innovation
Quintus Rajoo
The fact is general procurement leaders will struggle to keep up with the pace of IT evolution and resultant products and services offered by suppliers, is troubling. When procurement teams are not aware and knowledgeable enough of the IT products and services they are buying in a traditional procurement setting, sometimes they just buy based on pure price advantage/cost efficiency rather than understanding the strategic vision and holistic solution needed by the organisation. This specific challenge around IT procurement can be addressed by adding an IT procurement arm to sit within the CIO organisation to drive IT sourcing strategy and innovation in alignment with CIO’s vision for the organisation. This will not only drive cost efficiency but will lead to sourcing of innovative solutions.
Innovation will be key and IT procurement need to take advantage of technologies such as Block Chain and IoT as traditional procurement methods are becoming bureaucratic which leads to frustrations and inefficiency.
True transformation involves a complete Restructuring of the operating model and Technology systems, requiring the buy-in From the entire business
Agile sourcing methods need to be developed and deployed such as automated procure to pay, real-time sourcing platform with transparency and predictive demand management, which will allow repetitive transactions to become automated without human intervention via the use of robotic process automation. This will enable payments in real time by utilising real time delivery updates, increase transparency via blockchain. Global sourcing platforms will allow for better supplier management and predictive cost management.
This will lead IT procurement to become more proactive to better manage supplier performance by utilising advanced analytics, decision making will improve based on data and hard facts with minimising risk allowing procurement team to focus on innovation, improvements and less time ‘fire-fighting”.
Of course, to evolve and transform from a traditional procurement organization to an agile IT procurement organisation is not an easy task and will certainly bring challenges which can impede progress, some of these challenges are:
• Lack of IT product, services knowledge, and skills
• Lack of vision and mandate for transformation
• Investments in technology
• Lack of alignment within the organisation
• Too many contracts and suppliers
• Maverick spending
These challenges can be overcome with a clear vision and directive by the board, involving people who understand technology from the beginning. By selection of the right sourcing platform, clear policy guidelines and most importantly the involvement of CEO and CIO as key stakeholders of the transformation process.
True transformation involves a complete restructuring of the operating model and technology systems, requiring the buy-in from the entire business.
In conclusion, the way of traditional procurement function is over and it’s being turned on its head by rapid technology advancements which require a rethinking of how a procurement function operates within the organisation. It’s increasingly evident that an IT procurement function needs to be strategically embedded within the CIO function to deliver on the organisations strategic vision.
