The Future of Procurement — Let’s Be Positive!

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 how procurement can re-invent itself and why we do think it has a future!

THE FUTURE OF PROCUREMENT

So let’s be positive. Procurement can re-invent itself again. Whilst automation and dis-intermediation is happening, here are some questions that help to define where a continuing role for procurement (or something like it) might lie:

  • Who is going to bring to the top table an understanding of what markets and suppliers can offer when the board makes highly strategic business decisions with an external market angle – such as major insource / outsource decisions?
  • Who will specify, own and manage the organisation’s underpinning procurement-related systems (P2P, sourcing, analytics, SRM) and ensure the organisation is aware of and utilises the best and most appropriate new technology? (Someone needs to make sure that the organisation uses market-informed sourcing / advanced optimisation sourcing technology in the right areas, for instance!)
  • Who is going to take an overview of strategic suppliers, and oversee critical high-level relationships, when those suppliers may be working in many different parts of the business, across various function and units, maybe in different countries?
  • Who is going to provide the deep expert negotiation skills – because that is something that is very hard to automate or digitise and it is not a skill that can be easily tacked onto a marketing or engineering management role?
  • Who will have a deep understanding of which commercial mechanisms, key contract terms and so on should apply in every situation? For instance, should we use a risk / reward mechanism, and if so which one, for this large consulting contract? This goes far beyond factual category knowledge and whilst AI might go so far, it may always need that commercial judgement based on real experience.
  • Who is going to own the objective of improving the overall commercial capability of the organisation? Who will monitor, measure and report on the overall commercial performance of the organisation? That is surely key because it is a secret of success for an increasing number of organisations that, as we said, increasingly rely on markets and suppliers to achieve their own goals.

To understand more, you can download the whole paper, free on registration, from the Trade Extensions website here.

 

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