Why It’s Time For Ruthless Digitization Of Procurement And Supply Chain

Glenn Sawyer and Dan Miller

Scrolling down the list of Fortune 500 companies, you might imagine that by now they have all become merciless beasts of grim, mechanized efficiency. Digital technology has made it easy for them to trim all the fat it takes to run a global business, you assume, so they’re simply coasting along in first gear as they watch the profits pour in.

You couldn’t be more wrong.

Despite the profound opportunities businesses have had to digitize processes down to a fine art for some years now, most are still at varying levels of paper-based chaos in several areas of operations. This is particularly the case in the procurement department, where people are looking around at each other and asking why their business’ spend and supply chain processes are still so slow and fragile.

Some of the biggest and best businesses are still managing procurement with spreadsheets stitched together haphazardly across the business. They are still snail-mailing purchase orders and manually inputting details on PDF invoices. And they are still tidying up the messes left behind when human error inevitably brings the whole thing toppling down every so often.

It’s time for a revolution in spend management – a revolution we should refer to as “ruthless digitization.” There is money on the table for businesses that make it happen, with savings ranging from five to 25% for those already getting their ships in order. As competition in the digital economy increases and margins get tighter, it’s not an area that organizations are wise to ignore for much longer.

Tech companies have realized for a while now that digitization and hyperconnectivity were going to be huge boons for businesses looking to shore up their supply chains. Some have been carefully putting together software packages that aim to integrate all the tools needed for procurement into a streamlined, centralized cloud platform. These packages have come to be known by a few different terms, including “total spend management” and “business spend management.”

Total spend management digitizes procurement, invoice management, expenses and rewards, analysis and data visualization, supplier management, contracts management, and sourcing. It does all that within one system – with several specialized applications feeding into the cloud platform – and without an Excel spreadsheet in sight.

When businesses move to total spend management, it’s going to feel like a huge weight has been lifted off their shoulders. As competitiveness in the digital economy ramps up and growth becomes more challenging, that extra operational efficiency is going to be a massive advantage for early adopters. It’s time for businesses to get ruthless with procurement and digitize until they can digitize no more.

The future of supply chain promises a host of new and innovative concepts. To learn more and start a discussion with your team about the current and desired state of supply chain processes, review the SAP Supply ChainManufacturingAsset Management, and R&D white papers.


Glenn Sawyer

About Glenn Sawyer

As an industry expert and Internet of Things thought leader, Glenn Sawyer is the National Director of IoT Digital Transformation for SAP Canada.

Dan Miller

About Dan Miller

Dan Miller is a Solution Architect in SAP America’s Supply Chain Center of Excellence. Dan has 23 years of experience in manufacturing and information technology in a variety of roles from manufacturing engineering to IT program management for global firms with complex supply chains. Prior to joining SAP 14 years ago Dan was a project manager in the Automotive industry on global SAP deployments and maintenance management system rollouts.