3 reasons why digitisation of the supply chain ecosystem is crucial right now
Digitisation has been a buzzword for some time now but, given the current business scenario globally, it is being seen in a new light. The current pandemic has forced businesses to manage their processes better and that includes its supply chains.
Digitising business processes is important for three main reasons: compliance, efficiency and data accuracy. Driven not just by compliance and regulations by government departments like the tax authorities, customs, etc but also in terms of compliance with contractual obligations, proper digitisation of these networks means that not only does the system provide all the necessary basic information about the company but also transparency and verification of the business process from estimates to purchase orders to processing invoices providing real time information for managing businesses.
The ideal scenario would beto see that buyers and sellers are connected to open global networks where they can exchange their documents in any format that can be generated by whatever ERP or workflow solution each company uses and that this network is smart enough to convert them in a way that the receiver can read and interpret it accurately. Proper digitization in this form results in operational efficiency. It allows for verified and detailed documents to be distributed to the right people for informed decisions. For buyers, for critical industries particularly, it means a better view of suppliers, deliveries, and also management of the inventory and the buying process. For the sellers, this means a more efficient use of documentation and processing of estimates, orders, deliveries and payments.
However, we are not working in a completely digital world. We still have manual inputs to unsophisticated systems that cannot connect to a portal or businesses (some of the smaller ones) that can only generate PDF versions of scanned, manually raised documents. Manual processes like these are labour intensive and the chance for errors is quite high. Add to this, these not always verifiable or traceable. However, if they are linked to solutions or portals that are vendor agnostic like Pagero’s platform, these can convert manual documents into verifiable digital documents that can then be processed for better efficiency.
This leads into the last major reason for digitisation: data accuracy. Digitisation allows for traceability for documents and the process. The management also gets detailed, accurate information at line level that allows them to generate analytics like cash flow, indication of fraud, buying and procurement trends, contracts and discounts when the flow of data is digital and not manual.
Working with vendor agnostic platforms like Pagero, the supply chain ecosystem can create traceability, data accuracy and transparency. These platforms also create interoperability between other networks used the buyers and sellers anywhere in the world, making it futureproof. The opportunity to upgrade and expand the connections to the network makes it way more scalable and easier and cheaper to maintain than traditional EDI.