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14 May 2021

Digitisation of purchasing or purchasing of digitisation?

When we talk about digitisation, we can look at it from two different perspectives. On the one hand, it is about how purchasing can digitally map its own processes. On the other hand, purchasing plays an important role when digital solutions have to be procured for the whole organisation/public authority. Both are equally important.

The digitisation trend is continuing in the public sector and is being accelerated by the ongoing COVID pandemic and legal requirements. This is a challenge because there is often a lack of processes, mandates and knowledge of innovative digitization technologies.

Digital procurement processes

Innovative procurement does not only refer to which products and services are actually purchased or which procurement procedures are used. It is also about how professional and innovative purchasing is. Essential aspects here are digital procurement processes, digital procurement objects and digital business models (source: Prof. Dr. Michael Essig, University of the Federal Armed Forces, Munich).

Many public institutions are currently in the process of digitizing their procurement processes step by step and are examining the use of various IT tools for this purpose. The results of the KOINNO certification show that 92% of the almost 30 companies that have participated so far are already using IT tools. For example, tendering platforms and electronic tenders are common and are always used in 45% of the houses. Procurement via electronic catalogues is often or always practiced by 41% of the participants.

However, if you are only at the beginning, you should think of the following steps when implementing your digitisation project:

As-is analysis:

  • What is the procurement process currently like?
  • Which steps have already been digitised?
  • Which activities are still carried out manually?

Analysis of potential:

  • Where is the added value of digitisation in the individual process steps?
  • Where could one achieve the greatest relief through digitisation?

Setting priorities:

  • What could the suitable order for digitisation look like?
  • Where do you want to start?

Selection of tools:

  • Has a comprehensive market analysis been carried out?
  • Selection of suitable tools/IT landscape
  • How can several tools be linked together (interfaces)?

By involving purchasing at an early stage, potential can be fully exploited

Purchasing is not only faced with the challenge of digitizing its own processes. It also plays a special role if the entire organisation is in the process of digitisation. Ideally, purchasing is involved in such projects from the start, because at this point in time the possibilities for influencing the quality, costs and the degree of innovation of a procurement project are relatively high. There is also still enough time to conduct a comprehensive market survey and to analyse the procurement market with its potential suppliers as well as product and service offers at an early stage.

The advancing digitization has resulted in a changed procurement portfolio for purchasing - it is becoming more digital. The need for IT solutions and IT services is increasing. The market research, which should be carried out regularly anyway, is therefore extremely important. A suitable product group strategy can be derived from the knowledge gained there.

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