IDEa – Industrializing and Digitalizing Procurement Departments
IDEa gets your procurement performing at its peak. Upgrade to Procurement 4.0 by industrializing and digitalizing your procurement department!
What’s IDEa All About?
Procurement has developed a lot in most businesses in recent years. The last real step-up in performance was eProcurement. Since then, development has stalled. IDEa is an effective package of measures that enables procurement to significantly increase its performance.
What’s New About IDEa?
IDEa is about combining industrialization and digitalization to optimize the procurement process. The focus is on implementing the unique principles of IDEa:
- Specialization/Standardization: IDEa carefully combines industrialization and digitalization in procurement so as to optimize core processes. Quality and efficiency are increased by radically reorganizing work and specialization. This is done by a highly qualified team. In this way, Procurement 4.0 can achieve better cost and performance results.
- Automation: The aim of IDEa is maximum automation of procurement processes, including strategic processes, in order to save costs and increase quality. Core processes should be done by IT systems, not people.
- Informatization: Core processes are supplied with high-quality information. Sourcing is improved using an internet- and data-based SMI (Supplier Intelligence Information System).
- Integrated digitalization: Automation and informatization in procurement is closely related to digitalizing core processes. Procurement 4.0 is achieved by means of the computerized networking of procurement, suppliers, and business units, thus replacing previous standalone solutions and reducing process costs. Digitalization also minimizes risks, such as the loss of expertise when a buyer departs.
The Three IDEa Horizons
How can procurement improve its quality and performance, so as to operate at a board/management level and take more effective action? IDEa significantly improves your procurement’s performance and makes it a strategic weapon for your business. IDEa enables procurement managers to eventually make their way onto the board/management.
We can implement three packages of measures for you in a meaningful sequence:
Industrializing the core processes and organizational structure of procurement is the key element to significantly improving performance. Only then should a business begin with digitalization, because its benefits can’t be fully realized without a clear strategy and optimum processes.
Find out more here about the three stages of our IDEa projects:
Achieving Industrialized and Digitalized Procurement
To implement IDEa successfully, three things needed to be considered:
1. Identify and Quantify Potential
Before deciding to industrialize and digitalize procurement, you have to identify and quantify the potential. Switching over is only sensible if there’s a positive business case. We assess process and material cost savings, quality improvements, and whether process cycle times will be reduced.
2. Active Change and Project Management
Communication is a primary aspect of any change project:
You need to consider questions and concerns relating to IDEa in your business and at the interface with your suppliers, as well as analyze your corporate policy and key stakeholders. All stakeholders need to be included in the communication and collaboration process if change is to be successfully managed. It’s important to have an overview of the different ways of implementing this and to choose the most appropriate one to meet your needs. A realistic timetable and plan of action with clear milestones and results needs to be drawn up.
3. Tracking Success
The third aspect of the procurement process is tracking success both during and after the introduction phase. During introduction, the timetable is monitored and adapted if necessary to ensure that deadlines and sub-project milestones are met. Changes caused by unforeseen technical difficulties need to be taken into account.
Unlocking the full potential of an industrialized and digitalized strategic procurement process requires a system that measures success on the basis of quantitative and qualitative KPIs. The focus is on the number of FTEs in procurement, digitalization, and the financial savings for each A-commodity group.
KPI targets need to be defined and KPIs need to be regularly monitored for the project to succeed. If they go far off target, corrective measures need to be deployed.