The key challenges for sourcing and procurement that Dante Deo is focused on for our clients
Given the current uncertainty in the world economy and the impact of digitalization on business, it is imperative that organizations transform to remain competitive in the global market. However, most supply chain and procurement functions are not geared towards delivering at the required pace and thus stakeholders in the business bypass Procurement. In addition, many IT products are getting an IP address which results in the traditional boundary used to segment procurement categories within the ICT goods and services category becoming less clear and more difficult to define. With this, 5 questions relating to the pressure on sourcing and procurement should be asked:
Does your Procurement understand the complexity and fragile nature of the digital ecosystem?
To allow your organisation to remain competitive in the market, sourcing and procurement must understand the complexity of the ecosystem in which they are operating. Most supply chain and procurement teams focus on knowing their suppliers and the business stakeholders. However, it has become imperative that this horizon is expanded to include the business’ customers, partners and even your competitors to ensure that every commercial transaction is business focused. Therefore, the sourcing professional must understand the integration and interoperability of the 5 elements of the modern digital ecosystem.
Is your procurement able to deliver at the pace to lead you to the core of digital business?
The challenge for procurement is to be agile. Many procurement activities are simply too slow to meet the requirement of the business stakeholders. A CIO that we have spoken to has said: "By the time procurement has done their job, the need does not exist in the business any longer…."
Is your procurement aware of the changes in technology?
Modern technologies such as block chain and the advances in artificial intelligence (AI) are radically changing the landscape of business. Legal firms, insurance companies and banking institutions are only some of the industries today that have taken the leap by utilizing the power of these technologies to automate and transform their businesses into market leaders. If sourcing and procurement does not keep abreast of these changes in technology, these functions will become a stumbling block in the future.
Is your procurement still able to deliver value through the evolution in commercial models?
In the past, organizations bought hardware, software and services to run the business, but the new commercial models in the market today are significantly different. The adoption of cloud technology through Software as a Service (SaaS), Process as a Service (PaaS) and Hardware as a Service (HaaS) means that we no longer have ownership of the asset, but we rather “rent” the use of our software, “lease” our process execution, as well as follow a demand lead “pay as you go” hardware utilization model. So, can your supply chain and procurement team structure adopt and maximise this consumption-based model or are you, as Gartner’s research has revealed, actually paying 20% more than pre-cloud?
Is your procurement team positioning commercial deals correctly in relation to political changes?
For 10 years, companies have been outsourcing many aspects of their business. Concepts like offshoring services to India or Romania are well known. However, with the political changes in the world such as the change in the US administration, the Brexit vote in the UK, the growing discontentment of migrant labor in Europe and, closer to home, the downgrade of South Africa’s credit rating, Sourcing and Procurement should be evaluating the risk of cross-border transactions more carefully than ever before.
Specializing in Information Technology Procurement and Sourcing, Dante Deo is able to lead the procurement effort to enable digital business and unlock value and innovation. Given this specialization, Dante Deo continues to empower its clients, guiding you through the complexities of the digital ecosystem.
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