The COVID-19 pandemic has reinforced the importance of digital transformation in procurement and supply chain management according to a new study from Ivalua, a leading provider of global spend management cloud solutions.
The research has shown that seven in ten (70%) UK organisations say COVID-19 has increased the need for digital transformation in procurement. The study of 200 procurement, supply chain and finance professionals in the UK found organisations believe that greater digitalisation (84%) and better digital skills (83%) will enable them to more effectively mitigate the impact of COVID-19 on the business.
“The global COVID-19 pandemic will be the catalyst for accelerated digital transformation in procurement,” explains Alex Saric, Smart Procurement Expert at Ivalua. “The supply chain disruption caused by COVID-19 is completely unprecedented. Procurement is on the front line mitigating its impact, but the dearth of digital technology and skills in hindering its effectiveness. Teams are still reliant on paper-based processes or outdated systems, making it impossible to gain visibility into the thousands of suppliers they work with. This has made digital transformation vital, as those organisations that are more digitally mature will be able to quickly adapt to this new normal.”
According to the study, the biggest challenges organisations face when it comes to mitigating the impact of COVID-19 include: an overdependence on a limited set of suppliers (35%), identifying alternate suppliers (30%), a lack of understanding of suppliers’ risk exposure (28%), and a lack of visibility into tier 2 or 3 suppliers (18%). In response, 78% of organisations say that COVID-19 has increased their focus on supplier visibility, while 88% say greater digitalisation will improve their ability to collaborate with suppliers and find alternative supply during the global pandemic.
“COVID-19 has exposed gaps in organisations’ ability to gain complete visibility into their suppliers,” advises Saric. “This is leaving them in the dark as to the true vulnerability of the business and the supply chain to COVID-19. Digitally transforming procurement will allow organisations to create a 360-degree view of what is happening in the supply chain in near real-time, enabling them to make informed decisions about how to mitigate the impact of the pandemic. COVID-19 has exposed the discrepancy between more and less digitally mature organisations. As a result, we’ll see organisations accelerate their plans to digitally transform procurement, allowing them to mitigate the impact of this crisis and the next.”
Methodology: A UK study of 200 procurement, supply chain and finance professionals in organisations with over 1,000 employees, conducted by Vanson Bourne in May 2020 and commissioned by Ivalua.