In January 2021, industry leaders took part in a poll intended to determine the Procurement roles challenges. The poll revealed a constant pattern in the answers from Procurement teams localised in several geographic regions and working in different industry zones. The sustained advancement of Procurement denotes that the role is securing remarkable reliability within shareholders and the industry, bringing with it greater responsibilities and significant challenges.
Cost-saving targets are not going to disappear, but leaders must achieve them. Still, Procurement’s value is essentially realised by working on projects that provide monetary savings and further benefits.
According to Procurement leaders, the major Procurement trends for at least the next ten coming years are Sustainability, Automated processes, becoming an information centre and supplier’s centricity. Hereafter are the significant challenges Procurement is facing:
Pandemic initiatives
Procurement gained significant credibility in dealing with stakeholders, supply chains, suppliers, and sourcing throughout the pandemic. It is now advisable to re-evaluate and update these strategies to overcome the crisis.
Risk Management concerns:
· Supply Chain certainty.
· The financial steadiness of essential and high-spend suppliers.
· The problems that might trigger reputational harm distress.
· Breaches and other data protection/security policies.
· Corruption and bribery.
Automation and digitalisation
There will be many changes in the next decade, especially around the expansion in technology used. Now is an excellent time to support investment in systems and tools that improve efficiencies, such as Cloud, Robotic, Data visualisations tools, and more.
Still, Procurement’s future is human creativity combined with machine intelligence, as there is no invention of Artificial Intelligence with the creativity and emotional intelligence required in any business. However, it is advisable to work with enterprises investing in those tools, yet grasping the value of crafting an expanding pathway for the professional potential.
The escalation of Blockchain possibilities made us consider it an essential element in transforming how information flows, especially tracking ethical raw materials and preventing counterfeiting.
With the automation of Procurement, many roles will vanish, functions that are doing tactical Procurement will no longer be required. These tactical plans aimed to achieve short-term goals in a year or less; their main concern is delegating narrow responsibilities, frequently necessary to complete a company strategic plan.
- Procurement as an information centre
Leaders must re-evaluate the Procurement role in the next decade, now fortified as centres for business relationship management and information. It will link stakeholders, customers, suppliers and competitors in a net of relationships, connecting the outlines, recognising opportunities, clearing out issues, and keeping these many groups in sync.
Still, Procurement requires gaining access to the existing data and profit from such flow of data. It is advisable to work with Data Scientists because when accessing more systems, Procurement roles will move from auditing to a proactive fulfilment role.
- Sustainability
Sustainability matters are currently an increasing global interest around Economic, Social and Corporate Governance ((ESG). Green will be commonplace, as the bottom line is no longer profit but people and the planet. Sustainability measures are everywhere, and Financial operations are not the exemption; it will be just as crucial for all of us to recognise the role it plays and how Procurement can add value to improve this Sustainability in any corporation.
The top issues are:
- Sustainable and ethical sourcing.
- Human capital practices involving modern slavery
- Avoidance of bribery and corruption.
- Decrease of water and energy use.
- Reduction of CO2 emissions.
- Supplier-centricity
Developing more strategic relationships and becoming customer-centric will be essential to accomplish long-term benefits. Companies must ensure they provide their suppliers with uncomplicated access to innovations; enhancing suppliers connections can even up the risk of specific decisions whilst obtaining the best benefit.
- Diversity
Diversity has been more recently finding its agenda in the Europe and APAC regions. Procurement is supporting corporations by establishing a leverage ground for varied suppliers to contend with other suppliers. It enhances innovation in the business. Identify those suppliers who meet the diversity criteria.
How do you enhance innovation in your business?
