Procurement in 2020: What Will These New Metrics Look Like?

How will procurement measure success in 2020? And how will these metrics be different from today? One area that Deloitte explores in the paper, Charting the course: Why procurement must transform itself by 2020, involves the evolution of procurement priorities and organization. Specifically, the authors suggest that procurement “won’t succeed ‘by luck’ in 2020 -- fortunes will be won and lost based on preparation and planning, including developing a cohesive charter and strategy for what the function must deliver tomorrow -- nor by what the function has done in the past.” In these efforts, “procurement must prepare to support new global initiatives and emerging market growth.”

What will some of these areas look like? Deloitte suggests that procurement will be focused on four sets of outcomes in 2020: financial, customers/stakeholders, risk, and supply chain (inclusive of supplier management). The procurement compass below, taken from the paper and playing off the nautical theme, illustrates these four outcomes and how a range of internal capabilities including innovation and creativity, linkage & alliance, talent and technology, will support them.

Up close it's a big old mess

The authors describe the points of the compass as the “outcomes that procurement should be ready to achieve in 2020. These points are Financial Performance and Risk Management (to the North and the South) and Supply Base and Supply Chain and Customer/Stakeholder connection (from the West to the East). These outcomes, and the axes on which they rest, are neither mutually exclusive nor disconnected from each other. The North/South axis represents risk and reward, and the West/East axis represents the traditional supply chain flow of goods and services from an extended supply base to customers.”

We’ll explore each of these areas in more detail as we continue to share the key highlights of the paper.

This post is based in part on content from Charting the course: Why procurement must transform itself by 2020If you're interested in learning more about how analysts see the future of procurement and supply chain, register for our upcoming conference, Commodity/PROcurement EDGE.

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