The Future of Procurement – New Paper Highlights Threats To the Profession

Just before Christmas, our paper titled very simply "The Future of Procurement" was launched, courtesy of our friends at complex sourcing experts, Trade Extensions.

In a daring innovation for Spend Matters, this is a co-authored paper with Sigi Osagie, guru, adviser and Procurement Mojo author working with me on the project. Some of you might have caught either our pub debate earlier this year or my presentation at the Trade Extensions conference in the autumn, when we covered this topic, but in the new paper we take the arguments further and deeper. Procurement has blossomed as a profession and a function over the last twenty years; is the outlook set fair for the next twenty, or are the storm clouds gathering?

We think anyone interested in our profession will find this a stimulating read, and perhaps take away a few points in terms of what we all need to do, if we want that future to be a positive one. In today’s extract, we look at dis-intermediation -- one of the three major threats to the future of procurement. To find out what the other two are, you can download the whole paper, free on registration, from the Trade Extensions website here.

THE FUTURE OF PROCUREMENT

Part 2 – The Threats to Procurement

b. Dis-intermediation

One of the consequences of better technology is that the budget holder, and those who actually need externally provided goods or services to carry out their jobs, will have less need for a procurement function or professional to carry out many of the tasks that previously fell within the procurement remit. We are seeing this dis-intermediation already and it will certainly continue.

The procurement manager used to be the expert, the person who understood the market and knew who the best firms were. But now, just use Google and Wikipedia, and any line manager can know almost as much about the market as any procurement “expert” instantly.

Now this has happened before to procurement; 30 years ago, departments spent much of their time processing purchase orders and requisitions. That purchase-to-pay transactional management has been vastly reduced by the use of technology and user self-service; much of the same will happen to current sourcing and even category management activity. Solution providers in the sourcing area are already seeing “usability” as the number-one feature in their products, the aim being to allow non-specialists to run sourcing exercises quickly and easily. Good news for the organisation, less so maybe for the procurement “professional” whose job consists of running basic RFX processes, day after day.

It is worth stressing again though that this will happen at different speed in different organisations, some have not yet even made the transition away from procurement handling requisitions manually, so it may be some time before we see these effects in that type of business! It is also true that the advanced technology we are discussing will be provided by firms who will undoubtedly use procurement experts as part of the team designing and building these systems and apps.

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