Proxima Gets Us Thinking About Procurement in 2014 and 2015

Guy Strafford, one of the founders and directors of procurement outsourcers Proxima, is one of the most interesting thinkers about procurement around today, as well as helping to direct one of the top procurement outsourcing businesses in the world these days.

He and Jonathan Copper-Bagnall from the firm have published their thoughts on 2014 and the outlook for procurement in 2015. It’s well worth reading and much more stimulating than the usual pieces we see at this time of the year. Although it is titled “2014: the year procurement changed”, both the points around 2014 and the forward looking thoughts are equally interesting.

Looking back, the authors see procurement moving centre stage and more into the news. They comment on the effect that technology is having on procurement, from the growth of social networks (Procurious gets a mention) to “big data”. And they comment on the very specific new regulation which is forcing companies to put their audit business out to tender.

But their final comment on 2014 is in many ways the most perceptive, because it does get to the heart of some fundamental procurement issues. They comment that procurement has “made an industry out of complexity – creating processes rather than genuine strategic thinking. Business leaders can become perplexed by the rigidity and the number of these processes”.

In complex spend areas, this does not do procurement any favours. Businesses “want agility, accessibility and the power to apply expert bias in light of increasing complexity”. But businesses also want assurance, they are risk averse and they want audit trails for decisions – obviously stuff that procurement can certainly help with in terms of our processes and systems. Leaders don’t want to be disadvantaged or exposed by suppliers, reputationally, contractually or from an operational point of view. So that leads us to the big dilemma.

“What to do? How can we all deploy the right knowledge, expertise and support, at the right time, without incurring rigid processes that hinder agility or inhibit the customer experience”?

That is a great question. The article doesn't really provide a solution, other than saying they think Proxima has done a decent job in answering the question for their clients. But it is a fundamental issue for procurement. One of my thoughts for 2015 is that we are going to face increasing demand from budget holders to “do it themselves”, as technology helps them to gather data, carry out analysis, even run sourcing exercises. All without much involvement from procurement. So we as professionals and our functions have to continuously renew ourselves in terms of how we justify our existence.

That was all around their looking back - we’ll come back and look at Guy and Jonathan’s thoughts on 2015 in another post soon. But do read the whole article here.

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