Predicting The Future of Digital Transformation and Procurement

We asked four industry experts how they see digital transformation changing the procurement landscape. Read on to find out more.

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How do you see the digital transformation in Asian procurement changing? What are your top 3 predictions for procurement in the next 12 to 18-months?

Jasmin Abu Bakar

CIMB

My prediction over the next 18 months is that there will be lots of focus on robotic process automation on the procurement transactional activities.

The digital era will force more collaborative supplier partnerships as the conventional approach of competitive bidding may not necessarily be the most suitable strategy in driving best value for the organization and there will be more focus on sustainability procurement and green initiatives.

Dorthe Bergholdt

BW Offshore

Data is becoming available faster, more easily and in a more accessible format. This counts for the whole supply chain including the logistic processes. My top prediction is that “Big Data” and “Internet of things” will find its way into our agenda and strategies to start getting tangible benefits from the availability of data.

We will also see the big data influence our internal clients to help them predict and understand their demands and issues. This will help procurement make better forecasts and agreements. Secondly, robots will be handling repetitive operational purchase, invoice handling and more in the future.

Dr Christina SS Ooi

Malaysia Airlines

It really depends on the type of organizations which exist in Asia. Are they are family-run or Pan-Asian or are global organizations with physical presence in Asia? By and large, family-run or Pan-Asian organizations may not focus on digital transformation at this time. Many of these organizations have barely started to view procurement as a centralised strategic Source-to-Contract (S2C) function.

Here’s why I term this as “armchair procurement” - their focus is to address fundamentals such as putting the process in place, making it more manually efficient, and are totally fixated with cost cutting. Even if they use digitization as a key focus transformation enabler, Procurement would be the last function to be digitised, if at all. But the same cannot be said about global organizations with major footprints in Asia. Because for them, they believe in investing in digitalization of procurement function for long term benefits.

In the next 12-18 months, a lot of the procurement transactional tasks would be automated. A lot of the operational aspects of procurement would be outsourced or delivered as a shared service function. And procurement talent would continue to be scarce in Asia.

Keith Carter

National University of Singapore

Amazon will challenge indirect procurement with unbeatable deals and services. There will be no ground-breaking changes in direct procurement, but logistics services for last mile could go more brands like Grab and Go-jek.

Beyond 18 months, senior management is waking up to being data-driven, so once core data projects are implemented, analytics will be more ubiquitous. Continuing on this, I envision Analytics as a service providing the information needed without needing to implement an entire analytical backbone. Companies will work with data scientists like me to just answer their business questions as they come to the realization that they don’t need data warehouses and heavy implementations which aren’t cost effective in developing countries anyway. AI and Machine Learning is folklore from a faraway country until companies get enough data maturity, data strategy, data width and incorporate external data too. Prediction on just a little bit of badly managed data leads to wrong prediction.

Bernadette Maier

Takeda

What we will see in the future is an increase of RPA (robotic process automation). More and more procurement processes are being standardized and looked at from an end-to-end perspective suitable to be put into shared services. This is where automation and RPA comes to play. We’ll see rapid improvements in productivity and efficiency by the automation of repetitive manual tasks. The redeployment of the people from these repetitive tasks into more value-adding tasks will be a driver of both gain in productivity and an improvement in employee satisfaction resulting from redeployment to tasks that are seen as more meaningful and intellectually stimulating.