The Future of Procurement – Part 2, What Needs To Change Now?

We welcome another two-part guest post on our summer hot topic of the Future of Procurement – this is from Alan Haynes, and yesterday he took us through a brief history of procurement. Now, he moves on to the future.

We've looked at the history of procurement (briefly); if we want to have a successful future, what needs to change now?

  • Complicated and inflexible procedures and processes have had their day and need to go, and will go as technology will replace them, the capability of RPA, Bots and AI is amazing and continually increases every day.
  • The procurement personality cult (as evidenced as recently as July 2018 with the publication of the “definitive” Procurement Power list) and associated egoistic behaviours have to stop now, there is so much literature on how procurement should develop the ‘soft skills’ and right in the middle of the discussion, behaviours are demonstrated that cut right across our adoption of ‘soft skills’.
  • Innovation (an overused term I know) needs to come to the fore more than ever, we need to work more closely with our suppliers to extract the additional value not available through the standard contract management relationship approach, we need to let the businesses in which we ply our trade to ‘have their head’ occasionally in pursuit of new and different ways.
  • Market engagement practices need to change – the traditional RFx approach stifles creativity and in so many ways competition, as the cost and tedium associated with them deliver less than optimal outcomes.
  • Procurement skills and capability are not unique to the procurement profession; experience might be, but not the basic skillset. The technology march will make any uniqueness we believe we possess obsolete very quickly. Commerce, of which procurement may be classified as a significant sub set, has been around since day dot (historians believe the practice of commerce is seen in pre-historic terms) and will not go away. However, it is very likely that procurement as a standalone profession will significantly diminish in terms of uniqueness if we do not do something now.

 

So what is the future of the procurement profession?
Some may say that change will be slow in coming, based on historical precedent. However, I postulate that change will in fact come much quicker than we predict because the enablers of change, especially technological, are moving far more quickly today that they did previously.

  • The way we work (not just us but everyone) will be dominated with the use of technology, which will no longer be the ‘enabling’ mechanism, but will morph to the ‘doing’ mechanism.
    • Prediction: Over 80% of what we do now will be completed by technology.
  • The current apparent uniqueness of the procurement skillset will disappear, and businesses will use business people to do the commerce.
    • Prediction: The procurement function, and the profession, will significantly diminish in terms of roles and responsibilities
  • Market engagement practices will evolve, where suppliers will be available on demand and the current RFx type of process will disappear.
    • Prediction: Business will buy from established marketplaces that have been created through the advances of technology, and the accumulation of market power and leverage. Think Amazon.

We need to change, and we need to start now. We should be looking at the myriad predictions for the future and start adjusting our skills, methodologies and mindsets to meet these new and changing requirements so that we can again lead and influence our own future.

These are just my opinionated thoughts drawn from experience and observation spanning over 40 years. I don’t want to believe we are in some form of doomsday scenario, but I do want the profession as a whole to undertake some serious soul searching and research (funded and led by CIPS) to see how the procurement profession can fit into the future work landscape.

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