This last year was an eye-opener. The COVID-19 pandemic made many companies realize they were not as resilient as they had previously thought and starkly illustrated the need to revisit their operating models to mitigate against future disruptions.
Looking back, one thing is clear: companies that embraced agile processes and technologies before the pandemic were able to adapt much more quickly and resume business operations with less disruption to customers, employees, and suppliers.
Deloitte’s Digital Transformation Survey highlights that digitally mature businesses were three times more likely than lower-maturity companies to report annual net revenue growth and net profit margins significantly above their industry average—a pattern that held true across industries.
Today, transformational business leaders are shifting from rapidly responding to events to proactively planning for the future, ensuring they have the built-in agility to adapt to every possible scenario. Although risk management has historically been a focus for the core supply chain, there is now a new sense of urgency to extend resilience to previously untouched corporate business processes as well.
For those in supply chain and procurement, this expanded view of resilience has sparked interest in more fully digitizing enterprise services sourcing, historically a complex process that requires high levels of human interaction. This rethinking can empower employees, suppliers, and partners with new ways of working and the tools and technology to dynamically communicate and collaborate from any location.
Here are three ways forward-thinking leaders are building business resilience into services procurement:
- Focusing on Dynamic Sourcing Capabilities
As the scope of the COVID-19 pandemic became apparent, companies scrambled to confirm whether their current suppliers were able to provide the services they needed. In many cases, they had to quickly find alternative, qualified businesses to take the place of trusted providers.
Transformative leaders now realize how critical it is to have a dynamic sourcing capability for continuity across the value chain and are accelerating investments in technologies that provide this ability to their business stakeholders. Self-service platforms that allow users to find and collaborate with suppliers in an intuitive, immediate, and effective way are one example of such a technology. The ability to thoroughly and efficiently source demands should never be limited to the constrained resources that sit in the procurement function of the enterprise.
- Exploring AI and Machine Learning
Advanced technologies such as artificial intelligence (AI) and machine learning are already providing businesses with a competitive edge through the effective processing and contextualizing of complex data. Now, companies are investigating how AI can assist procurement teams with sourcing a variety of corporate and enterprise requirements, including those that are complex. Business leaders are investing in technology that does not supplant human decision-making but assists it for a competitive edge that provides greater agility, more efficient use of resources, and increasing spend effectiveness.
- Shifting to a Future-First Mindset
Innovative leaders see today’s challenges as an unprecedented opportunity to ensure they have the right people, processes, and technologies in place. These companies foresee and mitigate potential disruptions and ensure their teams remain focused on the priorities of the company, business stakeholders, and customers. Instead of looking back, today’s executives are skipping straight to the requirements of the future, letting go of archaic processes and tools and investing in new digital-based foundations that free up their teams to focus on adding value across the business through more strategic thinking and tasks.
Building Tomorrow’s More Resilient Procurement Model
Procurement has a critical, tangible impact on company performance. Forward-thinking businesses are taking action now to build long-term agility and resilience into their procurement processes with AI, automation, and machine learning embedded into new operating models. Those that use these uncertain times as a catalyst for innovation and digital transformation can position their teams to successfully navigate future disruption while accelerating growth and long-term value.