The Importance of Supply Chain Digitization for the Public Sector

Supply chain digitization means moving all non-physical, transactional aspects of a supply chain online

Christian Lanng
Christian Lanng

In many ways, public companies are held to higher standards than private enterprises. Since they have a stock to manage and shareholders to consider, the financial successes, production processes and legal claims of public companies are scrutinized constantly, and they are expected to maintain a high level of transparency.

This scrutiny and subsequent transparency often comes in the form of regular board meetings, financial statement press releases and conversations with the media. As a result, companies in the public sector are always looking for ways to introduce simplicity, efficiency and automation into their processes.

Recently, this desire for clean, transparent processes led to digitization, the movement of conducting business online as much as possible. Digitization is already rampant in the sales, marketing and product development departments of many major enterprises. Enterprises favor digitalization because it decreases the likelihood of lost paperwork, redundant approvals and incomplete records. One area that many public companies overlook when it comes to digitization, however, is the supply chain.

Essentially, supply chain digitization means moving all non-physical, transactional aspects of a supply chain online, including procurement, invoicing, approval cycles and payment procedures. Ideally, these tasks would all be completed in the cloud, since this allows employees to securely access supplier relation history and outstanding requests from anywhere at any time.

In addition to the benefits of anytime access, public companies have a lot to gain by making the switch to digitization. These include:

  • Saving money. Did you know that e-invoices allow companies to save an average of $505 per invoice [1]? That adds up to big savings if you consider that many companies are dealing with hundreds of invoices a month, if not more. Public companies have to report regularly to shareholders and those shareholders are always happy to hear about ways that the company is saving money.
  • Security. With a digital supply chain, all data regarding supplier interactions and transactions are stored and protected. This is particularly important for public companies. So many people are invested in their success or failure, including board members, employees and shareholders, that public companies are at additional risk of foul business play. For example, a competitor may take note of a company’s profitable quarter and attempt to sabotage a supplier relationship. An unhappy employee may try to leak supplier details that would hint at a not-yet-released product. Both of these situations present privacy and legal disasters, both of which public companies want to avoid and are two more reasons to consider supply chain digitalization. Digital systems, especially those stored on the cloud, keep your sensitive financial information more secure than it would be if it was floating around an office on a piece of paper.
  • Environmental sustainability. Not only is there a financial benefit to your company spending less on paper invoices, but companies can also increase the happiness and productivity of their employees [2] by aligning with their values and demonstrating sustainable practices. Today’s business leaders and the top talent they’re recruiting are as concerned about the impact their company has on the environment as they are on the bottom line. This is evident by the emergence of the Circular Economy; a new business ideal that encourages companies to rethink their business models that are sustainable using more renewable resources rather than those that are scarce.

Whether a public company is looking to spend less money, increase data security, lessen its impact on the environment or all three, supply chain digitization is the first step in the right direction. In today’s competitive landscape that craves speed and efficiency while expecting nothing less than total agility, public companies that make the move to online supply chain management are going to have happy employees, satisfied shareholders and a definite edge on the competition.

 [1] Source: http://www.pymnts.com/in-depth/2014/save-time-save-money-the-business-case-for-e-invoicing/#.VNpvvMbYnsm

[2] Source: http://nbs.net/knowledge/three-reasons-job-seekers-prefer-sustainable-companies/

Latest