Procurement leaders are facing more pressure than ever in the current business environment in the rise of prevailing disruption and increased competition from quick technology-focused companies. Artificial Intelligence and other impacts of Industry 4.0 are of great concern. However, organisations will need humans more than ever to manage the relationships with their Supply Chain ecosystems. The power of technological advancements should be seen as a great opportunity and not as a menace.
The Procurement function is predominantly measured and assessed on price reductions and cost savings. The lack of other evaluation criteria than price may be because we have not yet found useful and practical methods for measuring value creation in Procurement.
Collaborative approach: Whilst the vast majority of Procurement leaders see the need to train and develop their people, only 31 per cent are planning to focus on training in digital skills in the coming year. Both Finance and Procurement teams to be successful in achieving organisational goals, must have a strong collaboration between them, leveraging the unique talent that exists in their functions; this collaboration has to be foster to create a strategic procurement team, to drive interdisciplinary projects and think in terms of added value in the organisation’s Supply Chain.
Collaborative innovation with the suppliers we have is important. We will need to be more commercially empowered and highly skilled negotiators, able to get the best from our suppliers by offering the best of ourselves while optimising value. Supplier relationships also improve as financial volatility is minimised for suppliers, reducing risk in the supply chain.
Why is digitisation so important?
Procurement practitioners require access to vast amounts of information to effectively manage spend. This requires a new tool set and new competences; move towards systems that are building intelligence to make apps smarter. This intelligence is typically built using machine learning fed by large data.
Digitisation is so very important. Procurement smart companies are trying to gain a market intelligence advantage through digital business strategies in the supply chain. Getting the data off paper and into formats where it is visible and reachable is extremely important, making it much easier to collect, validate, coordinate, enrich and connect that data so that ‘whole pictures’ of the Procurement process can start to come into focus. The investments you make in getting this right will pay you back with more time to spend building lasting relationships and great experiences for your stakeholders and suppliers.
The digitisation of our organisations focus on two big things that are important for Procurement: Getting closer to clients and creating time and space to innovate on our processes and solutions that we’re delivering to our client, bringing innovation and really helping the business to understand their demand; a more innovative and imaginative approach to start understanding the client and exactly what they need, and approaching the problem from different perspectives.
Conclusions: There’s no question that Procurement teams needs to prepare for their own cognitive journeys. Cognitive tech will allow professionals to better perform their roles, not seek to replace them. We certainly need a solid group up at the top who can drive the innovation and integration of the cognitive tools.
Dave Food