Digital Continuous Improvement & Procurement: Value Creation at the Intersection of Smart Automation

Procurement organizations have a compelling motive for advancing toward a vision of smart, efficient, digitally enabled operations, maintains a new report from The Hackett Group.

“Digital Continuous Improvement & Procurement: Value Creation at the Intersection of Smart Automation and Advanced Analytics,” contains recent research finds that world-class procurement organizations that fully optimize their technology architecture and embrace smart automation technologies can realize a productivity advantage of up to 68%, compared to typical procurement functions (or the peer group).

However, attaining digital world-class performance like this remains a challenge for most, researchers add. To do so, procurement organizations will need to navigate the complex process of establishing highly interdependent digital capabilities. One specific opportunity to create value occurs at the intersection of smart automation and advanced analytics.

This particular combination of digital capabilities can create a continuous improvement cycle that enables value capture throughout the life cycle of automated processes. From our observation, the combination of smart automation, analytics and digital continuous improvement represents the next frontier of value creation in procurement's digital transformation journey.

In an interview with SCMR, co-author Jimmy Lefever, he noted that The Hackett Group's Digital Skills Poll showed that only 15 percent of surveyed procurement organizations have the digital and strategic skills needed today.

“Although the report is specific to technology, it's important to understand that digital transformation is about more than just technology, it's also about agility, customer-centricity, and finding new ways of doing things.”

As a consequence, he said, although there may also be a need for new talent with technical competencies or so-called “digital natives,” there will be an equally if not greater need for strategy and relationship-based skills in a digitally transformed procurement model.

However, more of them are starting to include predictive and prescriptive analysis, which not only tells executives what happened and why, but what is going to happen, and how to either accelerate or mitigate it, as appropriate (Hackett Group).

“With specific reference to the technology aspect, in the technology provider space, a greater emphasis has been placed on creating intuitive user interfaces than ever before,” concludes Jimmy Lefever.

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