Blockchain to Change Digital Procurement in Italy
For a large number of Italian Chief Procurement Officers (CPOs), Industry 4.0 technologies including blockchain or distributed ledger technology, cryptocurrency, internet of things, mobile devices, etc. will be of great impact: including Robotic Process Automation which will be crucial for 35% of managers. The purchasing sector, one of the key areas for employment in Italy, with more than 50,000 employees, is facing a crucial period of change. However, the country needs to focus on corporate reorganization and investment in skills.
Ready for Change
Technological innovation offers new tools that are revolutionizing the way companies operate, including the role of the procurement function within the organization and the relationships between customers and suppliers. Are Italian firms ready to face these changes? Actually, the answer in a study by SDA Bocconi in collaboration with Sap Ariba and Accenture which surveyed 100 CPOs of large Italian firms with revenues of more than €400 million.
The CPOs indicate the drop of costs, the management of risks and the improvement of quality and services as their main priorities for their department. In most cases around 57%, the country tries to achieve these goals by changing the operating model, expanding or adapting the existing one.
On the subject of innovative technologies such as blockchain, procurement managers are convinced that they will change the way their way of working and interacting with the ecosystem, but not all will have the same weight in the future.
Around 54 percent of CPO believes that predictive analysis is one of the most impactful technologies and 35 percent think that Robotic Process Automation (RPA) will be a key factor. However, only 21 percent consider the blockchain a promising technology and only 10 percent have named artificial intelligence (AI) or machine learning. And then, of the 100 respondents, only 6 have ongoing blockchain projects and only 18 percent are RPA projects.
Blockchain at the Wheel
The sample interviewed further underlined the primary obstacles for digital procurement in their respective companies from an organizational, economic and technological standpoint. There is a cultural barrier and resistance to change, while only 34% consider the skills – or lack thereof – a problem.
With regard to the economic aspect, however, the most perceived obstacle is the monitoring and calculation of the Rate on Investment (ROI), while only 15% complain about budget problems. Integration with existing technologies is perceived as the biggest challenge in the organizational sphere.
Nonetheless, the mere implementation of blockchain technologies is not enough if it is not accompanied by adequate organizational interventions: people, processes, skills must innovate, supporting and enhancing new solutions.
Also, the CPO must be able to look at the process in an end-to-end logic, governing all the relationship activities with the supply partners, and they must ensure that the Procurement and IT functions work closely together, with a lean, fast and effective dialogue processes.