Three key takeaways from a CPO discussion on the impact of internet technologies on critical procurement activities
A diverse panel sat down to discuss the impact that the internet is having on business and sourcing practices, with industry leaders representing the food and beverage, professional services and telecommunications sectors. The panel agreed, unsurprisingly, that the internet has fundamentally changed the way both professionals and consumers interact with products and suppliers, and procurement’s ability to leverage the power of the web so far, as well as how this will evolve into the future, provided the focus for the discussion.
Procurement is yet to fully leverage the power of the internet and its impact on buying
Valerie Therond, senior vice president (SVP), Orange, kicked off the discussion with an interesting paradox: procurement, while arguably the forerunner in internet-enabled purchasing, has struggled to keep pace with developments in the consumer space over the course of the last two decades. The panelists agreed that procurement is yet to realise any fundamental change in the way it buys products and services as a result of web technology.
Big data is helping buyers to gather and collate an ever-more expansive set of data. Importantly, this gives teams a greater depth of undertsnading, or, rather, it gives them the tools to develop a deeper understanding. The problem with all of this data is how to integrate and drive greater value from it. From a technology sourcing perspective, procurement needs to work out how to get closer to the supply base - how to bring the various partnerships together - in order to unearth innovations and move beyond ’siloed’ relationships.
CPOs need generalists, rather than technology experts, on their teams who understand and can contribute to stakeholder dialougue
The technical background developed over the last two decades - prevalent among many a procurement team, beit in engineering or other fields - needs to be evolved in order to envelope an understanding of information technology. The understanding needs to be thorough, but that does not mean hiring a team of technology experts. Procurement needs to be able to communicate with technology stakeholders on their level, but generalists with project management and well-honed buying skills are earmarked as especially valuable to the function, more so than specific subject-matter experts.
e-commerce will not be all consuming - certain categories will always be driven by metrics that cannot be commoditised
The panel mused on the future role of buyers themselves. The speakers asked: "will negotatiation be all that’s left for buyer?" Or, dialectically, "will it even be needed?" Ultimately, it was agreed that the ability to negotiate will always be important, regardless of the extent to which internet technologies permiate sourcing practices, because category price variance remains high, and as long as value continues to be created in the supply chain, margin will be there to exploit. Similarly, though, it will never be feasible to commoditise all categories in the way booking.com has for travel, for instance. If all that’s left is negotiation, where does the leverage for SRM or sustainability or innovation come from? It’s not all about bang for the buck.
from Procurement Leaders Blog http://ift.tt/1FZ1uT0
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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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