Trying to keep pace with new technologies is one of the biggest challenges that most businesses are currently facing. Trends in digital transformation such as AI, the Internet of Things (IoT), 5G networks and the proliferation of chatbots are impacting businesses of all shapes and sizes. Even procurement, a department traditionally found knee deep in paper-based spread sheets and contracts is embracing these innovations and are using them to automate manual, laborious processes improve supplier relationships and improve transparency over organisational wide spend.
So, as procurement takes advantage of the digital era, what’s likely to come next for the business function focused on delivering value and saving their organisations money? Will procurement finally get the business recognition it deserves? Here are my predictions on what’s to come for procurement:
- Quality data
Businesses are already making key decisions based on data analytics; however, data quality remains an ongoing challenge. In the future expect to see machine learning automatically cleanse data, ensuring that any errors or anomalies are corrected. For example, it will monitor and maintain supplier master data from contracts and the data used in pay runs.
- Procurement to drive competitive business advantage
Thanks to new technologies providing greater business insights, procurement will have more influence than ever before on overall business strategy, growth and competitive advantage. Procurement teams will be required to move their focus from spend and cost control and focus more heavily on facilitating innovation, business agility and continuity of supply.
- A move towards more agile procurement
Are we likely to see more departmental purchasing and procurement become a more centralised business function? I think so, and as a result we are likely to see better collaboration take place across the entire business. We could even see category managers become procurement specialists in their business units and build a network of gig workers to help satisfy their operational needs.
- IoT, data and stock tracking
More and more businesses are likely to take advantage of IoT to enable ‘touchless’ procurement where stock levels can be monitored automatically. It can help businesses track items in their supply chain in real time and enable asset-intensive industries to link data across the business to their suppliers. Businesses will benefit from an enhanced data platform as it informs decision-making around spend and purchasing patterns, catalogue content, supplier portfolios and contract fulfilment.
- RPA to go mainstream
Taking full advantage of Robotic Process Automation (RPA) procurement will be able to completely eradicate many of its day-to-day manual, high volume repetitive tasks. The procurement team can also say goodbye to hours spent compiling manual reports and instead use their valuable time more effectively and deliver real value to the business.
- Improved insights into the potential for supplier risk
Procurement teams will have better insights than ever before into their suppliers thanks to a clearer understanding of data. Internal data compiled by procurement, supplier information, market and analyst data on supplier performance will be aggregated and analysed to deliver a true 360° view of supplier performance.
- Procurement best practice to include Blockchain
We’ve seen Blockchain, the technology behind digital currencies starting to find its way into the procurement space over the past few years. I think in the future we’ll see it used selectively by procurement teams as it is expensive to develop and deploy. However, I think increasingly we’ll see it used in scenarios where there’s a need to track and trace to stop counterfeiting or a need for operational integrity.