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How CIOs can Cope with Changing European Procurement Market
From the past couple of years, European procurement market is undergoing tremendous changes. It is now time for CIOs to look at what procurement functions have in store and realign their business strategies to cope with the change.
FREMONT, CA: In a competitive, money-hungry business environment, it is no wonder that enterprises focus the majority of their capital, resources, and personnel on sales. Profit is everything in business, so business owners will think the best way to boost their bottom line. When so much attention is put on sales, other important business processes may get neglected, especially procurement— a strategic business function that plays a crucial role in business. No company can assume that the suppliers and markets that served them in the past will continue to do so in the future. It is always good to consider alternative suppliers and markets, so the risks posed by the shifting dynamics of trade are least spread.
Given that, for companies in any industry, smart procurement practices are essential for ensuring efficient operations and optimal bottom line. Business leaders looking to make their companies stay relevant are embracing advanced procurement functions as their essential business strategy. With innovations continuously changing the European procurement market, here is how CIOs can place a significant emphasis on their procurement processes for reaping maximum benefits.
• Using Digital Technologies
The rise of digital technologies has a positive impact on European procurement market. Organisations across Europe are now moving to adapt to cognitive procurement technologies including, big data analytics, machine learning, natural language processing, artificial intelligence, and robotic process automation. From automating repeating tasks to empowering CIOs in decision-making, from market visibility through product innovation to enhanced profitability, the benefits of digital technologies in procurement are enormous. With organisations realising the essentiality of digital procurement, CIOs have to take the leap from manual to digital transformation with a proper strategy in place. CIOs need to invest in right infrastructure processes and resources with a vision that aligns with organisational objectives.
• Crafting Talent Pool
To build a holistic supply chain and drive enterprise-wide cost reductions, procurement is utilising the maximum value of digital technologies. But, CIOs need to make sure that their teams have sufficient capabilities to deliver on the digital procurement strategy. Organisations can focus on finding the right talent and at the same time, grooming the existing workforce through specially designed training and skill development programs. CIOs would need to acquire the critical skills to succeed in a digital procurement world to remain relevant in the market.
• Collaborating with Suppliers
Collaboration with suppliers remains a fundamental approach among enterprises looking to crop benefits from advancing procurement function. With advanced technology and changing market trends, the procurement function is demanding a tremendous improvement in the relationship between suppliers and buyers. Given that, buyers have to collaborate with suppliers in making more strategic decisions right from the initial planning stage. Suppliers, thus, are becoming integral parts of the supply chain and are playing a pivotal role in shaping the backbone of procurement. With this transparency in collaboration giving birth to a competition between suppliers, it becomes necessary for CIOs to have a supplier performance evaluation plan in place. This plan stands for a focused and effective method for measuring and analysing the supplier performance and thereby enhancing vendor relationships, reducing costs, and enhancing business performance.
• Moving to Effective Change Management
Among European enterprises, change management was one of the most significant roadblocks in achieving procurement goals. But with the advent of digital technologies, most of the procurement processes are being automated. As a result, the freed time—the perk of automation—is deployed in a more strategic activity such as change management. More and more organisations are now focusing on a smooth change management plan through increased focus on communication with employees, engaging them through the process and by providing adequate training and support.
Technology innovation and the shifting dynamics of European procurement market are challenging businesses across all sectors right now. These new pressures are pushing CIOs to think about how they can prepare for emerging trends and power their companies' ability to thrive in future.
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