James Marland, SAPAriba’s VP of Network Growth shares his New Year thoughts on the future of Procurement
As we talk about the Future of Procurement it’s certainly tempting to talk about all the new stuff. We all love Blockchain and Machine Intelligence. But one of the things I really see most of all is the change in the organisational model of Procurement. Sometimes we call this governance.
What I see is the movement from the Age of Mandate to the Age of Guidance. So what do I mean by that? The Age of Mandate is very much about rules and policies: telling people what they can’t do. And really, in Procurement we interposed ourselves into our stakeholders’ business process: kind of “got in the way”. And we were measured on savings.
Movement from the Age of Mandate to the Age of Guidance
As we move into an Age of Guidance this model changes quite a lot. We’re now able to use information and insights to guide employees to the rich variety of tools and services available to them. And procurement is seen now as bringing innovation into the company.
Other things that we are going to be seeing will be not imposing ourselves with policies, not saying “No”, but getting out of the way. Eliminating friction and allowing business to operate at the speed they need to support their customers.
Now, with all the mundane stuff automated away with machine intelligence and robotics now procurement is able to be measured not so much on savings, or throughput but on more important metrics to the company such as inventory reduction, end-user satisfaction.
Also, increasingly, procurement is probably the best place of all corporate departments to focus on the really strategic company goals around initiatives such as diversity, anti-slavrey and the whole ethical supply chain.
Last thought, surprisingly, as we move into 2018, the oldest trading relationship, the one between buyer and supplier is no longer the optimal model. No more a one-to-one relationship between buyer and supplier but instead giving an end-user access to a wide network of value added capabilities to allow them to bring any innovation into his or her business.
So 2018: Procurement is still the place to be.
For more on SAPAriba’s Guided Buying which enables the Age of Guidance, that James refers to, take a look here.