A number of recent independent studies from financial advisory firm Deloitte, procurement specialists Zycus, and the GSMA have highlighted that the procurement industry is turning its attention towards the use of digital platforms to help connect buyers and sellers on a global basis. This research suggests that even though it is still a relatively nascent business, these platforms are gaining significant global momentum and are beginning to reshape traditional business practices and replace them with newer and more dynamic services.
Deloitte surveyed 324 Chief Procurement Officers (CPOs) from 33 countries in 2016 and discovered, perhaps unsurprisingly, that cost reduction was the top priority for CPOs in their quest to sustain business growth in a slowing market. However, 62 per cent believed that they did not have people with the skills to deliver their strategy and 60 per cent believed there was no clear digital strategy. The survey concluded that “current procurement practices are at risk of becoming a bottleneck that only digital disruption can unlock.” Zycus also surveyed over 400 predominantly US-based procurement professionals in 2015 and found that performance was strongly linked to procurement technology. Their study highlighted that a third of companies believed they were behind in their use of technology and were planning technology improvements, and only eight per cent believed they were effectively using existing available technologies.
In a previous blog, we revealed the findings of our own in-house research that looked at the state of the procurement market worldwide. In a survey of 125 mobile industry procurement professionals working at mobile companies of all sizes, we discovered that the approach to buying and selling employed by the telecoms industry still relied largely on pre-existing personal relationships with very little business being conducted online or on digital platforms. This meant that companies were missing out on discovering new suppliers that could offer more competitive pricing, services or innovation by returning to tried and tested suppliers.
All three surveys highlight the global trend towards digital platforms in procurement and suggest that these will be the future of the industry. Launched 18 months ago, the GSMA Marketplace has quickly established itself as the de facto platform for the telecoms industry. It has experienced incredible growth since its introduction and buyers have initiated over 242 business deals worth an estimated USD$270 million in value. At time of writing, there are almost 4,000 active sellers and over 700 active buyers – including 255 mobile network operators – with 48 live RFX worth over USD$6.5 million..
A digital platform that can replicate the business conducted at our global tradeshows such as Mobile World Congress is in the interests of the industry. GSMA Marketplace was created principally to help operators, vendors and other players in the mobile ecosystem to make connections with global suppliers as well as shorten the time spent on procurement with the overarching aim of driving deeper operational efficiencies. This can only realistically be achieved online and our service remains the only digital commerce platform dedicated to the mobile industry.
To find out how the GSMA Marketplace is changing procurement, please visit: www.gsmamarketplace.com.