Critical analysis (2500 words) The digital revolution is changing the way how businesses operate. Similarly, customers are also demanding greater transparency into what they are buying as to how...

DIGITAL PROCUREMENT
Table of Contents
Introduction    3
Critical Analysis of the Literature    3
Foundational Concepts of Digital Transformation    3
Formulating Digital Procurement Strategies    5
Future of Digital Procurement    6
Digital Tools for Digital Procurement    7
Pros of Digital Procurement    9
Cons of Digital Procurement    10
Conclusion    10
References    11
Introduction
As businesses all across the globe have started to digitise, it has become mandatory for business organisations to automate their business process. This automation has not only been assisting businesses to make optimum utilisation of the resources available but has also been assisting to build strong relationships with customers and suppliers through transparency. One such move that has been taken by a number of business organisations is to include digital technologies to evolve the procurement function of the business. Procurement, in simple words can be defined as the management of purchasing and acquiring third party goods and services for supporting the operations of the business. Over the past decade, the advancements in technology have been paving the way for digital procurement. Data driven optimisation and advanced analytics have been assisting to gain better insights and move the procurement process to the centre of value creation. Digital procurement has been assisting businesses to connect with external partners through a network and create new business models. Here, we shall analyze the existing literature relevant to digital procurement
Critical Analysis of the Literature
Foundational Concepts of Digital Transformation
With the advent of digitisation, digital technologies have been widely used to change the existing business models so that opportunities that are capable of producing more value for the business can be easily captured. Digitisation has been transforming the function of procurement. Digital procurement can be defined as the process of including digital technologies to enhance the functions of procurement. As opined by Barrad, Gagnon and Valverde (2020), combining the procurement functions with technologies like big data analytics, machine learning and artificial intelligence has been enabling businesses to create a robust supply chain and has also been helping a number of businesses across the globe to gain sustainable competitive advantage. These digital transformations have been creating value for procurement in three distinct yet interrelated ways. These have been discussed in details as below:
Informed Decisions and Gaining Better Insights
The use of big data and advanced analytics for the purpose of procurement has been helping the procurement team as well as the management of the organisation to gain better insights into the available data. Gaining better insights also help to make informed decisions. Therefore, this helps to improve the performance of the business considerably.
Automated Processes
Using artificially intelligent machines and robots has made several tasks easier and less time consuming. Robotic processes have speeded up the transactional tasks through automation and have been ensuring that the accuracy of these tasks is being enhanced under all circumstances. The implementation of artificial intelligence algorithms has been increasing the cognitive activities thus helping to improve speed and productivity.
Collaboration
These digital technologies have been enabling procurement function of the business to be performed in real-time and in collaboration with other business functions and business units. Aligning with the arguments presented by Kosmol Reimann and Kaufmann (2019), these digital technologies have been assisting to analyse the real-time demand and has been allowing for development of a number of products.
Furthermore, it is evident that digital procurement has proved to be beneficial for optimising supply chain of businesses and has been enabling business organisations to focus on their core competencies such as providing the customers with excellent quality products and services. The speed of operations being conducted has also increased considerably. In addition to this, digital procurement has also been enabling organisations to be innovative and has been improving the productivity of the business organisations considerably. Moreover, digital procurement has been reducing the risks associated with human errors and is ensuring that the tasks being performed are accurate. Consequently, digital procurement has been enabling business organisations to save overhead costs and therefore, enabling organisations to maximise their profit margins.
Analysing the available literature further it becomes clear that data-driven optimisation and advanced analytics have been enabling the management of businesses to gain insights that can help in the improvement of cross-domain value-chain interactions. According to Nicoletti (2020), artificial intelligence has also been transforming the procurement functions. Automation tools being used for performing the function of procurement are intended to improve down-stream procurement activities. These have improved the efficiency of these processes drastically. Digital transformations have been assisting to bring procurement at the centre of value creation by enabling external connections of the business. This has also been assisting to develop new business models.
Formulating Digital Procurement Strategies
A number of digital procurement strategies have been transforming the way tasks are being performed in the business world. These digital procurements strategies are based primarily on the future trends. As mentioned in the work of Chi, Zhao and Li (2016), this helps to ensure that the strategies that have been formulated by an organisation helps that organisation to gain a lead in the market by ensuring that the changing needs and preferences of the customers can be understood and fulfilled in a timely manner. To come up with a strategy that is effective and sustainable, it is vital to gather sufficient information about the market as well as the internal...