COVID-19 Accelerating Digital Transformation in Procurement

Digital transformation has been a hot topic across the width and breadth of global industry for some years now, with businesses the world over discovering new and innovative ways to deploy digital technology. These technologies have been helping companies reach new markets, streamline operations, reduce errors, automate processes, and generally become better and more effective forces in their respective industries.

However, at the close of 2019, nobody could have predicted what was just around the corner. The outbreak and rapid spread of the SARS-COV-2 novel coronavirus and the COVID-19 disease it causes has caught the entire planet off guard and governments, businesses, and people have been scrambling to deal with it ever since.

In what is being described as the “New Normal” organizations are having to deal with the fact that this pandemic will not be over for some time and, to ensure long term survival and prosperity, methods must be deployed to allow for business to continue.

Supply Chains

One industry which is particularly valuable during a situation such as this are the global supply chains which make sure people and businesses across the globe are able to access the products they need. At the beginning of the first lockdown measures, panic buying saw many locations running out of key products as concerned citizens stocked up. This has exposed the significant flaws in our overreliance of “just in time” supply chains and has caused many procurement businesses to rethink their strategies.

In order to maintain the flow of goods, Procurement organizations have therefore been accelerating the implementation of digital transformation as it’s these technologies which are empowering companies to carry out business while still taking the necessary precautions to slow the spread of this deadly virus.

“The digitalizing of operational processes has been on the radar for companies of all sizes for a while, but has usually landed in the ‘we’ll get to it eventually’ column,” said Jonathan Whiteside, Principal Consultant at Dept in the UK. “Businesses would talk about live chat or automating end-to-end operational processes but, ultimately, would decide not to go ahead, since they couldn’t justify the internal change impact to support it. But now, new processes are being implemented overnight; businesses have already adapted and rely on the technology to facilitate the changes.”

58 percent of businesses across all sectors who had not previously implemented digital transformation now say the pandemic has accelerated their plans. The vast majority of those have stated their main objective with digital transformation is to become more operationally efficient during this crisis, rather than to seize new business opportunities or achieve increased monetization. This elegantly demonstrates how business priorities have shifted from expansion to survival.

Video Conferencing

One of the most important technologies which has seen a drastic upturn in use are video conferencing platforms such as Zoom. In March 2020, Zoom’s usage statistics jumped from around ten million to over 200 million virtually overnight.

Most countries have been introducing some form of lockdown measures to curb the spread of COVID-19 and asking their citizens to work from home wherever possible. This means that video conferencing has been a key tool in enabling employees to continue holding meetings, pitching to new and existing clients, and generally keeping a certain amount of face to face communication continuing throughout these restrictions.

With many parts of the world now experiencing a second wave of the virus – at time of writing the UK is less than 24-hours away from a month long second national lockdown – the reliance on these technologies is only set to increase as time goes on – at least until an effective vaccine is developed.

Process Automation

Because of the ease at which this coronavirus is transmitted from person to person, social distancing has become a normal part of human behavior over the last year. This means that the fewer people a company can have physically present at a warehouse/office/distribution center/etc. the better and this is where automation can help.

Whether it’s robots, such as the ones seen in Amazon’s labyrinthine distribution centers, which are able to automatically pick and sort deliveries, ready to be loaded onto trucks for dispatch, or computer software which can receive and process orders and make sure they are sent to the correct department, automated process reduce the need for humans to be close to one another for prolonger work shifts, and reduce the need for them to interact with computers and other devices which can be hotbeds for disease transmission if they are not regularly cleaned and disinfected.

With these technologies in place, workforce shifts can be staggered to minimize COVID transmission. This not only ensures the ability of a procurement business to continue operating to bring crucial products to its clients, but also improves worker health and safety, their confidence in the company they work for, productivity for both employees and assets, and enhancing overall product quality.

Data

Another technology which is going to see increased importance as this pandemic grinds on will be the use of digital information to better meet the needs of clients. With the reduced ability to meet in person and the rapidly shifting business landscape, the need to stay on top of customer expectations has rarely been more crucial.

Existing customers will find their needs are changing rapidly as the situation continues and evolves and new clients will be coming on board already immersed in the so-called new normal. This means procurement organizations need to be more agile than ever to be able to effectively serve both existing and new customers.

However, one of the worst situations a company can find itself in is one where it’s simply reacting to events as they occur. The business is always off balance and never able to get ahead of things and there is no way it can effectively meet customer expectations in this state. To get ahead of these rapidly evolving needs, a business needs to be able to predict the direction of travel and pivot itself in a controlled and strategically sound manner.

This is where data steps in. Experienced data scientists working in tandem with AI technology can analyze vast reams of information and use it to build mathematical models which help businesses make informed and intelligent decisions instead of simply travelling wherever the wind takes them. Data is not infallible, not by any stretch of the imagination, and the instincts and experience of decision makers will always have an important role to play, but it can help guide those decisions in a more meaningful way than would have previously been possible.

Final Thoughts

There are many ways digital technology can help procurement businesses more effectively navigate the stormy seas of the COVID-19 pandemic. Even those organizations which had previously been delaying their digital transformations are now seeing the value in accelerating their plans and discovering how these incredible technologies can help them become more streamlined, efficient, and effective companies.

The threat to life and economy presented by this virulent disease isn’t going anywhere anytime soon and businesses who haven’t yet fully embraced digital technology are going to find it increasingly difficult to thrive in this environment as time goes on. Inversely, those organizations which have accelerated digital transformation stand the best chance of coming out the other side of the pandemic relatively unscathed.