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Head of Procurement at Sanitas
Digital Procurement Transformation in a Highly Regulated Environment
Many companies are in the process of digitalizing their procurement. Numerous applications are available to manage this process professionally. The main reasons for digitalization are:
• No centralized procurement in place
• No defined governance and processes in place
• No defined approval flows
• Maverik buying
• Cost pressure
• Savings
However, the main drivers are quite different depending on the sector. Companies traditionally cite increasing and predictable savings as the first factor. Particularly with health insurance companies, who operate in a highly regulated environment, the first issue that comes to the fore are compliance and governance.
Comprehensive digitalization of supplier management with integrated third-party risk management and a seamless contract management system ensures that all relevant processes are mapped during contract creation and additionally secured with a defined approval flow.
All contracts are then archived digitally in the cloud, making it easier to find them even years later. Time-consuming physical filing in an archive is obsolete but digitalization enables the mandatory and strict regulatory requirements of the authorities to be mapped and implemented consistently.
It is also important to consider that the entire procurement process, tenders and third-party risk audits up to contract creation and signing can happen remotely. This makes work much easier, especially during times like the coronavirus pandemic or when working in global virtual teams.
Of course, digitalizing these procurement processes redefines many of the company’s long-established ways of working, specifically the learned processes acquired over the years. It’s a major change and involves a certain amount of anxiety.
During such a fundamental change in processes, it’s essential to install a system of professional change management. After all, nothing is more of a hindrance than a lack of acceptance of the new systems and processes. Acceptance can only be maintained right from the start, with the close support of the teams affected. This is essential for a smooth changeover and for achieving the original objectives.
Time-consuming physical filing in an archive is obsolete but digitalization enables the mandatory and strict regulatory requirements of the authorities to be mapped and implemented consistently
C-level management must be clear about the objectives that digitalizing procurement should bring. Even if saving targets were the top priority in the past, the increasing quality requirements, such as the Act on Corporate Due Diligence Obligations in Supply Chains or ever-stricter regulatory requirements from the authorities, make the digitalization of procurement and the accompanying processes essential.
Based on the objectives defined by management, the architecture and relevant processes can be optimally mapped and infringements of the law avoided.
