As technology evolves, how will procurement teams will be able to better prove their organizational value and make a major impact on the company’s bottom line?
In this guest post, Procurement Leaders invites BravoSolution’s Mickey North Rizza to make some predictions over the future of the procurement executive role - particularly the effect of technology on how the function operates.
The future continues to look bright for procurement professionals. As technology evolves, procurement teams will be able to better prove their organizational value and make a major impact on the company’s bottom line, ultimately earning these procurement leaders a seat at the executive table.
That said, procurement’s role has drastically evolved over the years. During the World Wars, procurement was merely considered a clerical role, with a focus on making enough orders to keep the economy running. In the 1960s, sourcing emphasized competitive bidding and price was the determining factor in most contracts. In the late 1990s, procurement and sourcing started evolving into functional business process technology platforms. Today, procurement professionals have made a name for themselves – they’re considered instrumental to the success of organizations, recognized as strategic business assets, and responsible for an umbrella of initiatives.
Here are a few predictions for what the future holds for CPOs, and what their lives will look like in the next 10 years.
- Purchasing Will Be Easier: Everyone loves shopping on Amazon because it’s quick, easy and they feel like they’re getting a good deal. I predict that by 2025 the procure to pay experience will have transformed to look very similar with an easy to use UI, personalized recommendations based on past purchases, comparison shopping capabilities and easy contract facilitation. Having all of these services at our fingertips will help procurement teams improve efficiency, obtain even more visibility into sourcing processes, and drive strategic initiatives. In light of this, enterprise will also find fulfilment an easy exercise.
- Suppliers Will Be Innovation Partners: Supplier value management (SVM) will evolve past a tactical approach of segmenting suppliers and developing strategies based on each tier, to a teamwork approach that drives mutual success. Buyer-supplier relationships will be focused on innovation and developing a quality, differentiated product, rather than cutting costs. With globalization making supply chains even more complex and risky, suppliers will have more influence on brand reputation, product quality and profits than ever before. Procurement leaders will need to use SVM to ensure the process and skills are in place to drive sustainable mutual success for both buyers and suppliers.
- Decisions Will Be Powered with Data: Data science, predictive analytics and big data -- including point-of-sale (POS) data on purchases and real-time inventory tracking -- will transform the way supply chains are managed. With data, procurement leaders can plan manufacturing to meet demand, identify further cost savings, and better predict future risk. Supplier value management will take the world by storm, giving procurement a way to fully leverage suppliers to foster new and innovative ideas that can ultimately lead to business growth and profitability.
The CPOs of 2025 will lead a very different organization than what is common today. Procurement teams of tomorrow will be comprised of a smaller, stellar group of leaders focused on achieving company value, rather than catering to a functional approach of completing transactions and finding savings. This means more visibility, smart procurement processes and collaborative discussions, ultimately helping your team outperform the market. Unprecedented value will be the outcome of the CPO and procurement in 2025.
Mickey North Rizza is VP of strategic services, BravoSolution.
This contributed article has been written by a guest writer at the invitation of Procurement Leaders. Procurement Leaders received no payment directly connected with the publishing of this content.
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The views expressed in this post and throughout the series are the autor's own and not intended to reflect the views the YQ Matrix platform, its users or any associated organisations.
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