Ariba’s ‘Vision 2020’ report on the future of Procurement (part 1)

We mentioned – a couple of weeks ago now – the Ariba “Vision 2020” report, which looks at the future of procurement 10 years on.  I’m sure you’ve all read it now and are ready to debate the key points made....

As a report, it has a huge amount of content. It’s not all pulled together into very structured conclusions however, a little like my favourite Tom Peters book ("Re-imagine"), which is an inspiring read with something interesting on every page, but all a bit random and therefore somewhat exhausting to take in.  'Vision 2020' has 31 different topics – a page each – and at times you think “hang on, doesn't topic 28 contradict the predictions under topic 15?”

But I thoroughly recommend you take a look as it is very thought provoking and a good read.  We’re going to feature about half a dozen of the key issues it covers, and give a sense of what the participants say, and then our view. We won’t in all cases give the attribution for every comment we quote from the report, just in the interests of time and space, but the contributors are given on page 3 of the report.  And I am very aware that it’s easier to criticise than to come up with clever predictions yourself – so my job is much easier than those brave people who stuck their necks out and contributed!

We’ll start today with a quick look at Automation.

Routine purchase transactions will be done by end-users with little to no involvement from sourcing; systems will enforce appropriate compliance, workflow, and rules....

Managing purchase orders and invoices will be fully automated by 2020, even in the least developed companies," agrees Javier Urioste, former CPO with several non-IT organizations. So, too will processes for competitive sourcing and contracting.

Where it makes sense...items will be available in catalogs. But other situations may require access to markets for real-time competitive bids. "End users will execute their own bids. Procurement’s role will be to set the automation engines up, then monitor and manage to make sure they continue to run.”

Workflow will enable end users to produce agreements that meet minimum criteria...

So the theme is really a continuation of what we’ve seen over the last 20 years – technology and automation covering more and more of the procurement workload.  That’s hard to argue with, and you only have to look at the share prices and valuation of tech companies in our sector recently, to see that ‘automation’ has reached a tipping point (in my opinion).

There’s a linked theme in the report around ‘work goes mobile’, with more use of mobile devices, for information gathering, analysis and making transactional work easier / more timely. Again, that’s hard to argue with and we see it happening already, with software providers enabling authorisation of requisitions or orders for instance via smart phones.

What is perhaps more interesting is the idea that this automation will change the balance between work done by procurement staff and by users.  If users can access catalogues, run bids, even auctions perhaps, without too much input from ‘procurement’, what does that do to the shape, size and role of the procurement function?

That’s an issue that runs through the  report, and we’ll come back to that in our future posts looking at other themes covered by Vision 2020.

First Voice

  1. Flog:

    Speaking from personal experience from when I’d a ‘real job’ in the public sector and was trying to put more automated processes in place. I continually came up against the DoF brick wall what continually wanted pieces of paper, preferably in duplicate and physically signed in blood before anything could be ordered!
    If automation means no physically signed pieces of paper, will we get their in another 10 years? Maybe if we have, dare I say it, a change in the heads of finance and their need for bits of paper??

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