The Future of Procurement Strategy by Market Dojo

Frustration to Transformation: Predicting the Future of Procurement

INNOVATION, STRATEGY, Sustainability, ESG, AI & AUTOMATION
Blogs, Rules, 1. Reimagine Strategy

Overview

Continuing our exploration of the evolving landscape of procurement, this article delves into the insights shared by thought leaders and practitioners on their predictions for the future of procurement strategy. They highlight four key drivers—protecting the planet, leveraging AI and automation, embracing disruptive innovation, and expediting digital transformation—and all within the context of encouraging procurement professionals to embrace the new rules to adapt for a sustainable and agile future.

This article is also published on ProcurementMag.com


 

In our New Rules of Procurement Engagement series we are engaging with leading procurement thought leaders and practitioners, from global powerhouses to tech wizards, to gain insight into the changing landscape taking place in procurement

Our previous article looked at how procurement needs to harness a strategy-driven and tech-informed approach to be more proactive and ultimately agile. As part of our interviews we asked our New Rules Changemakers to share their thoughts on the main drivers of procurement strategy in the future. Their predictions fall into four areas:

  • Protect the Planet
  • Leverage AI and Automation
  • Disruptive Innovation
  • Expedite Digital Transformation

Frustration to Transformation: Predicting the Future of Procurement

Protect the Planet

In light of the latest United Nations Climate Report, it’s evident that there is a pressing need to intensify efforts in advancing the ESG agenda. Failing to do so would result in significant shortfalls in achieving targets, not only for businesses but also for nations and the planet as a whole.

For procurement this means sourcing alternative products that meet ESG goals, for example finding local suppliers to reduce carbon footprint.

“In the future, we will lose some raw materials so we have to find a way of replacing this kind of product to protect our planet. We have to find a way of using our resources in a better way and check how we can recycle them to not affect our environment. So I think there will be a lot of innovation regarding sustainable products.” Caroline-Patricia Huberdeau, Global Procurement Strategist

To get ahead of the curve, organisations should proactively integrate ESG goals into their supplier onboarding processes, ensuring that sustainability criteria are embedded from the very beginning of supplier partnerships.

 

Leverage AI and Automation

AI and automation can be used to improve supply chain efficiency by automating repetitive tasks, streamlining established processes, and deconstructing supply chains to identify areas where efficiencies can be made. 

Also, by drawing inferences from data, AI can help to reduce total cost of ownership (TCO), identify cost-saving opportunities, improve forecasting, measure supplier compliance, and reduce risk.

These are just a few examples, as AI continues to develop procurement can expect to see even more innovative ways in which it is being used.

“I think automation is going to have a huge role to play in procurement strategy moving forward. Once you’ve identified all the different processes within your strategy and the people to drive those forward, you can then look at the technology in terms of how you can automate as much of that as possible and make it as light touch as possible from the procurement function point of view.” Nick Drewe, Procurement Tech COO

 

Disruptive Innovation

Procurement can learn from the world of disruptive innovation and move away from big-ticket, incumbent solutions available to only large procurement departments to best-of-breed, agile solutions.

The new generation of CPOs need to lead the way in determining which technologies to adopt and which processes to focus on.

“People will use technology that is intuitive, that’s easy to get into, whether they switch on their machine or flick on the app. So, in a world where procurement teams might be focused on one or two elements, best-of-breed undoubtedly is going to be in a position of strength.” Richard Nixon, Management & Tech Consultant

 

Expedite Digital Transformation

In order to keep progressing, and in some cases, make up lost ground, on their digital transformation journey, procurement leaders must learn from the last few years’ turmoil and be proactive to avoid future supply chain risks. 

“If we’ve learned anything in the last three years, it’s that we have to be open to change and that requires companies to ‘double down’ on embracing their technological journey, the transformational journey — meaning that they continue to look at what are the best solutions in the marketplace.” Canda Rozier, Experienced CPO & Procurement Evangelist

Embracing best-of-breed solutions enables smart-thinking around how to integrate seamlessly between systems and departments, including the shift for procurement to embrace Finance and the Accounts Payable landscape, evolving from a Procure-to-Pay (P2P) digital model to Source-to-Pay (S2P).

 

Preparing for Tomorrow

The future of procurement rests on the answer to one question. Will you continue to follow the old rules or is it time to join the movement and embrace the new rules of procurement engagement?

Get more insight into the New Rules and join the Changemakers!

new rules of procurement engagement

 

July 20, 2023
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