Digital transformation of the purchasing and supply management process

Abstract

Purpose The aim of this study was to identify interventions for and mechanisms of the digital transformation of purchasing and supply management (PSM) processes. The digital transformation of tactical and operational PSM processes has often progressed slowly despite the solid knowledge of advanced technologies.

Design/methodology/approach This study used a qualitative exploratory approach based on 14 interviews with PSM executives from firms that are continuously working toward using advanced technologies in their PSM processes but have not yet gained full strategic benefits from digital transformation.

Findings This study formulates five propositions regarding interventions and mechanisms that can positively influence the digital transformation of PSM processes. The main intervention in this regard is the renewal of data infrastructure, including platforms. PSM-related data should meet needs from both tactical and operational viewpoints. When applications serve as a source of data, they support digital transformation. Mechanisms such as supplier measurement and process improvement are outcomes of the digital transformation of PSM processes.

Practical implications This study highlights the importance of common data sets for tactical and operational purchasing. These purchasing data should be owned and served by a cross-functional team. To create this interoperability, a firm needs global governance of open standards.

Originality/value This study makes a theoretical contribution to the discussion of what kind of interventions positively influence on the digital transformation of PSM processes. Specifically, this study explains the integration needs of data and applications.