Procurement Is Not Doomed! But Needs to Change…

deabte1So last week we gave you a taste of the arguments in support of the motion “Procurement is Doomed” as debated at our Procurement Pub Debate recently, held at the Old Bank of England pub in Fleet Street.


Opposing the motion – so arguing that procurement is NOT doomed – were Garry Mansell, MD of Trade Extensions, and me.

Trade Extensions market some of the most advanced sourcing optimisation (“market informed sourcing” as we like to call it) software in the world, so Mansell sees procurement in many of what are literally the world’s biggest and most complex businesses. He argued that the somewhat artificial divides between supply chain management and procurement need to come down – that the successful “procurement” practitioners of the future will have a wider remit across the whole end to end management of external resources.

Now in a sense, you could interpret that as an argument that procurement is doomed, if it turns into something else! But he suggested that it could and perhaps should be procurement folk who move into that space.

Part of my argument was that simply, we have been here before. eProcurement – automating the purchase to pay process –was seen 20 years ago as something that might threaten the very existence of procurement. But that didn’t happen. Instead, whilst we saw the procurement role change, away from transactional management and into category management and strategic sourcing, the “profession” ended up stronger, not weaker.

Now I accept that automation and easier-to-use tools, apps and systems are going to push more work into the hands of users rather than procurement. But I hope that will just re-define again what it is that procurement does. However, procurement will need to change again if much of the routine sourcing work (for example) is no longer in our portfolio.

So what is it that procurement can, should and perhaps will be responsible for in years to come? As I said during the debate, if procurement is doomed, then:

  • Who is going to specify, own, and manage the underpinning systems in the organisation to support procurement activity – that includes technology around P2P, sourcing, analytics, contract lifecycle management ...
  • Who is going to take an overview of strategic suppliers – who may be working in many different parts of the business, in different countries even?
  • Who is going to be the really, deeply expert negotiators – because that is something I don’t think you ever will digitise and it is not a skill that can be easily tacked onto a marketing or engineering role?
  • Who is going to own the objective of "improving the overall commercial capability of the organisation"?

So, there you have the arguments from Garry and me that just carried the day and led to a narrow vote that procurement is NOT doomed. Thanks again to Trade Extensions for sponsoring the event, to everyone who came along, and we will be picking up on some of these points in days to come and exploring further this whole question of the future role of procurement.

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Voices (2)

  1. Steven Mills:

    Maybe there’s no need to change but there is a greater need to focus on delivering the fundamental basics? I addressed a similar issue back in May, in my post Procurements Future…all change!

    I’m a firm believer that procurement professionals need proficiency in the core competencies before adopting the next new trend, as this is what gives us credibility and enables delivery of significant results. However some insight as to how we need to adapt and what skills and competencies are required in the future, allows us to think about and nurture the next generation of procurement leaders.

  2. John VS:

    Procurement is dead! Long live Procurement!

    Automation and self service will increasingly impact on low value/high volume transactions and the long tail but will need Procurement to manage at the strategic level. We will need to shape the service layer and management tools to track and manage spend and behaviours. The risk is that maverick users run riot, it is Procurement’s challenge to mitigate that risk by thinking creatively and engaging with the drivers of this new future, and anticipating the ways in which big players like Amazon will leverage their platforms going forward.

    This should free Procurement resources to be more commercial and engaged in the high value, low volume transactions where we can become true commercial assets to our organisations, able to develop and apply new and improved methodologies to add value throughout the supplier relationship.

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