The “personal or digital” question is anything but irrelevant
Digital processes take the burden of unproductive routine jobs off procurement departments. However, personal contact between the buyer and the supplier remains crucial. As is so often the case in life, it all comes down to the right mix in procurement matters, too.
E-commerce is here to stay. According to a study by IFH Köln, 24% of total B2B revenue is now generated using digital channels. Nearly three-quarters of B2B e-commerce is already conducted using electronic data interchange (EDI). Unit sales via online stores and marketplaces are growing at the fastest rate. And when the economy is plunged into turmoil, as it was during the COVID-19 crisis, the digitalization of sales and procurement structures picks up additional speed. Why?: Because it promises the cost savings and efficiency gains that are usually urgently needed.
It's not what you say, but how you say it
For all the added value that digitalization brings, we are convinced that digital solutions will not make personal customer relationships obsolete any time soon. Because good business is about more than just costs and process optimization. Or to put it another way: it's not what you say, but how you say it After all, personal contact is the only way of building trust, conveying a sense of security and directly influencing a company’s reputation. This is the only way to build resilient relationships that determine how long buyers and suppliers remain a good team, especially in times of crisis. In short: the “personal or digital” question is anything but irrelevant. First and foremost, it is important that both aspects – the digital and the personal – are managed in the best interests of the company.
In our view, the same applies to the relationship with platform solution providers. After all, if procurement departments and service providers do not work closely on digitalization projects, the result of the collaboration will be, at best, a system that merely replicates existing structures in a digital solution. And what happens then is what Thorsten Dirks, member of the Executive Board of Deutsche Lufthansa AG and head of the "Digital and Finance" department there, so aptly put it: "If you digitalize a bad process, you end up with a bad digital process". Or, at least equally undesirable: an abrupt new start with a completely new procurement architecture, as promised by standardized out-of-the-box solutions.
The aim is to work together to identify all of the processes, objectives and wishes of the procurement department and incorporate them into a tailor-made platform solution. A digital procurement platform has to be able to integrate existing IT infrastructures, such as enterprise resource planning and accounting, as well as all requirements determination, decision-making, approval and sign-off processes. Existing suppliers and price agreements should also be taken into account. This requires a strategic approach from planning to the pilot and implementation phase and, in the long term, throughout the entire operational lifecycle. And precisely because the necessary expertise is usually lacking internally, managers, bosses and departmental heads should rely on the consultancy services offered by e-commerce experts and digital strategists.
From our point of view, it is crucial for the success of the project to have a fixed point of contact for the implementation of the platform during the entire set-up phase. This person advises the customer on which processes should be automated and which should be customized. Ideally, this then results in a platform that relieves procurement of unproductive tasks such as checking, merging or comparing. It also makes all key figures available at a glance, creating greater transparency for controlling. This sort of platform gives procurement the freedom to focus on productive core tasks, such as the development of future procurement processes and strategic purchasing, as well as personal interaction with suppliers and relationship management.
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