Over the next few weeks on Spend Matters, we’ll be sharing excerpts from what is probably the most thoughtful and forward-looking paper we’ve seen on the future of the procurement profession in some time. Titled Charting the course: Why procurement must transform itself by 2020 and authored by the Deloitte sourcing and procurement team, the analysis is a tour de force of what is currently evolving in the profession, as well as the gradual (e.g., think climate change like) and seismic (think asteroid impact magnitude changes) that are going to completely stir the purchasing pot by 2020.
The paper also offers a framework for looking at how these changes will impact different procurement outcomes, from risk management to financial performance. It also delves into broader supply chain integration and what team and talent structure must into. My favorite personal components of it are “snapshots” that highlight how specific worlds might look in a few years– from a truly forward-looking lens! In looking at different sections of paper, we will of course offer our own analysis and commentary on the topics as well.
Without further adieu, we’ll get started with Deloitte’s framing argument and introduction, including a bit of art history:
“Procurement in 2020 will look very different than it does today. This future world will alter existing assumptions and introduce emerging hazards. It will require additional skills, knowledge and tools to address entirely new challenges while solving current ones more creatively. And it will likely change the very core of how companies look at procurement as an organizational function and an overall company competence.
Procurement organizations experienced the first steps on this journey in recent years, but in the decade ahead there will likely be a dramatic shift that will be eye-opening by comparison. In 2020, new capabilities and competencies will likely be mandatory. Organizations that fail to embrace new procurement models may fall further and further behind the competition, jeopardizing overall competitiveness and viability.
History has much to teach us about periods of accelerated change — in business and beyond. The painter Joseph Turner captured a fundamental technology shift from sail to steam propulsion in the famous painting, The Fighting Temeraire. The ships in Turner’s painting are most notable for what they signal about a radical future — the modern tug stands in the foreground of the sail-powered warship, which went from being the epitome of naval superpower to a relic almost overnight.
The tug in the painting represents a future that speedily ushered in new technologies, rendering a massive and battle-tested ship irrelevant on the high seas. The fate of the old ship represents the potential future of the seemingly high-performing procurement organizations of today that could be outmoded and outgunned in a matter of years.”
This post is based, in part, on content from: Charting the course: Why procurement must transform itself by 2020.