Big Changes on the Horizon for Team Procurement

We welcome this guest post from Daniel Ball, Director, director at Wax Digital looking at what the future holds for 'Team Procurement.'

Over recent years we’ve spent lots of time researching what’s driving and shaping the daily decisions being made by procurement professionals; the results have been surprising and enlightening, ranging from different approaches to innovation to what it takes to become a CPO. All in all we’ve found that people in procurement are grappling with day-to-day pressure to change and improve the business world they’re currently operating within. Amidst all of this it’s also important to keep an eye on what’s coming down the line that could change the goalposts for procurement in the future.

To this end we recently turned our sights to the concepts that may well not be on our procurement colleagues’ agendas yet, but could be soon. Speaking in-depth to a number of technology-savvy professionals and industry influencers (including Spend Matters’ Jason Busch) showed us that future procurement could look very different from how it does today.

So what did we find out? I’ve summarised the four key themes that came out of our research here.

Integration without frontiers

Firstly procurement experts told us that in the future there will be no limits to the integration of procurement systems, in terms of what you can integrate them with and what processes, insights and decisions they can drive.

Based on this we anticipate a shift in the core focus of procurement systems, from the features and functions they perform in relative isolation to becoming part of something much bigger as a business integration platform.

Rather than just being open to integration led by other business processes and systems, they could actually drive the integration. This may also help professionals to become more proactive in their stance to working with the business, armed with the ability to integrate.

Procurement intelligence

Our panel also thought that procurement systems could go beyond informing and processing to predicting, learning and deciding – as intelligent apps.

As procurement processes become increasingly technology-enabled, organisations are collecting more and more rich data which they could and should be utilising. But as this ‘big data’ merges with artificial intelligence it could give procurement systems decision making power - learning from information and trends to make automated choices rather than just feeding data to people to do so.

We don’t think this will remove the need for procurement professionals, but it could alter their role; cognitive technologies guiding a lot of the fundamental sourcing and purchasing workflows is a real possibility.

The catalogue is dead …

Next up, we found that a one dimensional and static catalogue marketplace approach will be replaced by a multi-dimensional, layered style of buying.

It’s no surprise that, certainly in non-core categories, there are many good business deals to be had from the likes of Amazon, Overstock or AliExpress and other online retailers. These web shops, especially Amazon are creeping into corporate purchasing and adding a new dimension.

While we’re probably not going to see organisations ‘shopping’ on these platforms for their critical supplies or commodities, procurement technologies could well morph to provide ‘layered’ buying processes or options. Catalogues for critical supplies, alongside automated mini sourcing, and B2B and B2C webstores – all integrated and filtered to find the best deal in each purchase. Tied up with AI, systems may also decide themselves which ‘layer’ of the market is best for each purchase instance.

Procurement but not as we know it

And finally, there could be more holistic changes on the horizon for team procurement. Our panel believed that procurement systems could actually move out of the procurement function and become known as commercial planning and delivery platforms. We see this meaning that procurement technology could follow a similar path to that of MRP and finance systems when they evolved into ERP software as core planning systems.

A modern procurement platform covers much of the same information and function in terms of master data, business rules and integrations. In contrast however, procurement platforms are not back-office repositories but active transactional platforms, lending themselves more appropriately to the task of steering the business’ commercial delivery.

Benefits could include being able to govern a business around real-time supply chain risks or financial and market forces or customer demand. In the future we may see procurement and its systems drop the ‘procurement’ mantle altogether, assuming the position of a new type of C-level executive with technology at their fingertips!

 

Discuss this:

Your email address will not be published. Required fields are marked *