7 predictions about the future of procurement
- 21 Oct 2019
- Thought leadership
Make no mistake, digital transformation is fundamentally changing the way procurement takes place in businesses all over the world. And as new technology continues to be developed and released at breakneck speed, trends and patterns emerge, offering a glimpse into the way we’ll do things decades from now.
In this blog post, we sit down with Pete Kinder, our VP of Research & Development, to identify seven things that are going to drive the biggest changes in procurement.
#1 – Procurement will become synonymous with driving competitive advantage
Top procurement functions will become a key part of large organizations and will influence the overall business strategy, growth, and competitive advantage. Those in leadership positions in their respective procurement teams will shift their focus from cost control to facilitating innovation, business agility and supply continuity.
#2 - Machines will do the heavy lifting with data
Data is already instrumental in helping businesses make key decisions. The challenge many businesses face with data, is keeping that data up-to-date and clean. In the future, machine learning will cleanse data automatically, ensuring that any anomalies are automatically rectified.
For instance, supplier master data will be monitored and maintained from contracts as well as data used in pay runs.
#3 – Procurement will be more agile and partner directly with other departments
We think procurement might end up being a smaller, highly centralized function with specific people doing buying-related tasks in specific departments within your business. Essentially, procurement will take advantage of remote working, allowing better collaboration to take place across the entire business.
Category managers might become specialists in a business unit, tackling all the departmental procurement needs. They might build a network of gig economy workers, to satisfy operational needs and requirements.
#4 – Tracking data will help businesses spot patterns
The internet of things (IoT) helps businesses track outcomes in real-time. This can include items in transit throughout the supply chain. This helps asset-intensive industries link data across the business to their suppliers, effectively facilitating touchless procurement, where stock levels are monitored and acted upon automatically.
Ultimately, this process will facilitate an enhanced data platform to inform decision-making around spend and purchasing patterns, catalogue content, supplier portfolios, and contract fulfilment.
#5 – Robotic process automation (RPA) will go mainstream
RPA will become a key part of any procurement solution. Procurement functions will eliminate the need for manual intervention on large-scale, high-volume repeatable tasks, such as those associated with direct spend.
Manual reporting will be eliminated too, helping procurement teams focus on more important work instead of compiling laborious reports.
#6 – You’ll use internal and external data sources to analyze supplier risk
Data once again is set to transform procurement, this time offering procurement teams the opportunity to understand their suppliers better than ever. Internal data compiled by procurement, supplier information, market data and analyst data on supplier performance will be aggregated to offer a true 360-degree view of supplier performance.
This will help you build supplier risk profiles as well as empower you with the tools to predict risk events/activities.
#7 – Blockchain will be fully integrated into procurement best practice
Blockchain has been doing the rounds in the procurement space for some time but it has yet to have been fully realized. We think it’ll be selectively used by procurement functions. While it might be costly to develop and deploy it, we think it’ll be likely used in scenarios where there’s need to track and trace to counteract counterfeiting or a clear case for operational integrity.
Have you got any predictions to make?
Procurement has an exciting future ahead of it. But do you have any predictions you’d like to make? Let us know what you think on our LinkedIn or Twitter accounts.