Rachel Spasser, Senior Vice President and Chief Marketing Officer at Ariba and I recently recorded a podcast where we discussed the future of procurement. The podcast was moderated by Dana Gardner, Principal Analyst at Interarbor Solutions and moderator/host at Briefings Direct. Spoiler alert: the future is now.
Here is a link to the “Future of Procurement” podcast (there is no registration – the podcast runs 22 minutes and can be heard online or via iTunes).
I’ve included a few choice excerpts below:
Business networks, which helped to drive the first stage of business transformation, have helped to drive visibility, innovation, cost efficiency, convenience, and compliance in the New Economy. As a result, businesses of all sizes are better poised than ever to leverage technology solutions, including business networks, to thrive in the future of procurement.
“Over the past 15 years, we really have experienced a procurement revolution, although at times it feels a little bit more evolutionary in nature,” noted Bartolini. “What’s now being prized within the larger enterprise and within procurement itself is the ability to be agile and to drive innovation. This has effectively pulled procurement further into the spotlight, as it really does serve as a process hub within the organization and it really does serve as the prime relationship point for third-party suppliers.”
What’s enabling procurement’s more prominent role in the organization? Why technology, of course. “The good news in all of this is that the technology that was introduced around the time that we started thinking about the procurement revolution has finally started to catch up to the actual user needs, from a usability standpoint, from an integration standpoint, from a time-to-value standpoint. We’re really seeing organizations now move from the initial adoption, where they are just trying to get activity through their systems, to becoming more effective in their usage of these systems and technology.”
Technology adoption and usage has been enabling organizations across the spectrum of industries to deliver greater innovation, value, and speed to their customers, and help grow their bottom lines. “The consumer today really expects better, newer, and more innovative products in a rapid fashion and at a cheaper cost,” Bartolini adds. “That sounds exactly like the world of procurement and what it expects in the market from suppliers.”
As a result of the advances made in business technologies and networks, and the benefits derived from them, customers have come to expect more for less. This challenges many companies and organizations to look internally for greater cost efficiencies and savings.
“We are in a new age of innovation that has dramatically shifted product lifecycles and market opportunities. Organizations today understand that the window of opportunity to charge a premium on their products and services has collapsed dramatically. They’ve become increasingly reliant on their supply chains to maximize what can be often bigger opportunities in smaller windows” said Bartolini. “What this does is it requires a shift from net-sum negotiations to win-win negotiations. Procurement must shift from managing contracts and service-level agreements (SLAs), to managing business outcomes and change their view of [strategic] suppliers from an order-takers to key collaborators. It’s happening today but that is really the future of procurement – this is where we should all be heading.”
Clearly, as technology advancements have ushered in business transformations, they have also changed the internal dynamics of stakeholders, and caused others to rise in prominence. “Procurement has stepped out of the back office and into the front ranks, and continues to gain in stature,” notes Bartolini. “As it gains in influence, it really continues to guide organizations in making smart decisions within the organization and identifying the right business partners outside the organization.” Indeed, “there is now a Chief Procurement Officer or single point of contact” in a procurement office in 85% of companies.
Although procurement’s rise in prominence happened after technology innovations helped to drive business transformation, procurement as a whole continues ahead on its journey.
As the speed of business continues to change and as Chief Procurement Officers and their organizations continue to broaden their influence and control across the enterprise, the future of procurement will start to look very different from its past. The future of procurement is bright. It will be exciting and challenging, even daunting at times… and we’ll be covering it here and helping to chart its course.
RELATED ARTICLES
The State of the Chief Procurement Officer in 2014
Ardent Partners Publishes Annual State of Procurement Report
Procurement’s Evolution (Part IV): Convergence with Contingent Workforce Management
Ariba LIVE 2014: “The Outcome Economy”
What Every Executive Should Know About Business Networks
Procurement’s Evolution, Part III: Convergence With Marketing
