Procurement in 2018: Guidance and Predictions from an Industry Veteran

Where is procurement going in 2018? While it would be easy to fall into the perennial trap of describing long-term trends as the next big thing, thankfully there are saner heads that can guide us into this new year with sound advice in addition to modest predictions.

Procurement veteran Peter Smith is one those people. Over on our sister site Spend Matters UK/Europe, he has offered practitioners some simple (but important) reminders to consider in 2018, as well as a forecast for how events in the procurement technology market could play out.

Rather than pontificating about the importance of digital transformation or rehashing hollow motivational slogans, Smith advised procurement to remember four key points:

  • Procurement’s role is to lead in terms of the interface between our organization and external supply markets.
  • Procurement must in all situations strive to be aligned with the organization’s objectives, goals and culture.
  • Procurement supports and achieves value for organizations by a duality of approach in terms of that external supply — managing riskand looking for opportunities.
  • Procurement has only two raw materials available to deliver against those first three points. They are people and tools, which generally means technology these days. Everything procurement achieves is through people using those tools appropriately.

With those four points in mind, there is then one larger point to ask: Do you and your team have the skills necessary to do the above? In 2018, consider the importance of committing to gradual improvement in your ability to serve the business and others, and don’t expect a silver bullet like artificial intelligence, blockchain or the like to fix all of your problems.

That said, technology is, as Smith pointed out in his fourth point, generally the tool that enables skilled procurement professionals to get the job done these days. So naturally there are some salient issues to address regarding the procurement technology market in 2018.

If there’s one word that describes the solution provider market this year, it would be consolidation. In Smith’s view, merger and acquisition activity in 2017 produced a clear “big three” among mainstream software vendors: Jaggaer, Coupa and SAP Ariba. He also noted Proactis, Tradeshift and Ivalua as contenders the big three will need to defend against, adding that additional consolidations with further acquisitions “seems like a pretty safe bet.”

And just how should procurement understand and prepare for the coming wave of vendor consolidation, with its mash-up of modules and coalescing of capabilities? Smith recommends practitioners take a hard look at SolutionMap, to start.

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