The Future For Procurement

In 2022 there are five specific trends that are predicted to be shaping the industry into the mid 2020s. These trends are visibility, velocity, value, talent and agility. In this article we will look at each of these different ideas and suggest how they might shape the world of procurement into the future.

Visibility of Data is Key

Although many of us like to imagine that technology is the silver bullet that will solve all issues, in the world of procurement you could make the argument that it has resulted in an overwhelming amount of data. Not only can the sheer volume of data be a concern, but the various systems and databases that it is held in can be mind-boggling. 

Visibility is the trend towards shaping this data so that it is more accessible and more valuable for the people who generate it. Procurement teams will move towards these new best-of-breed software and this will allow greater organisation and accessibility of the data underneath. Providers of software need to understand that the speed of capability needs to improve with customers expecting results in days and weeks, rather than months and years. 

Procurement Needs Velocity

When we talk about velocity, we’re really thinking about streamlining the procurement processes and working towards touchless procurement. This in itself is a goal worth aiming for as it will enable lower value and risk indirect transactions to flourish. 

The sort of things that procurement departments will need to look at are Robotic Process Automation (RPA), advanced sourcing optimisation, advanced analytics and, perhaps more important of all as we move towards 2023 will be artificial intelligence. As many forecasters have predicted, this will involved a shift towards automated delivery and away from human capability – this is a transition that will need to be managed. 

Other capabilities including warehousing automation, driverless vehicles and drone deliveries will come online. It’s fair to say that procurement departments who do not get to grips with the blossoming of new technology will be in danger of being left behind.

Value: the ever-present requirement

The prediction is that as 2022 progresses, procurement leaders will be asked to deliver value across all parts of the piece. This means that they will need to harness all of the different factors we are exploring here to ensure that they are able to move from ancient technologies to real-time value tracking. This should be enabled for all aspects of the procurement chain from facility to spend categories and everything in-between.

Talent Is Everything

It’s reasonable to say that HR is undergoing one of the most far-reaching changes in decades, as the world adjusts to the “new normal” and adopts hybrid working models. The 2022 challenge for procurement is to be ready to assist in this change and to specify what technologies and resources are needed to make the new world more adapted. 

As the challenge to recruit and retain gets ever harder one of the key challenges to procurement leaders is to prioritise the managing of the talent that they have. In part this involves understanding that there is a growing demand for different skills in the workplace, and different training needs too. One of these is ensuring that digital skills are baked in to all new hires and not just a “nice to have”. Alongside this is the value of communication skills in the digital era, which are essential too.

The Question of Agility 

In 2022, procurement will shift from traditional data aggregation to creating real-time digital twins of the organization (DTO). This will allow what-if scenario planning, spend modelling and cost management. It is this that will underpin the question of agility in procurement. 
This is something that most procurement departments will be fully aware of, thanks to the calamitous events of recent times including wars, supply chain nightmares, gas price hikes and COVID. Procurement teams need to use data visibility to help them make key business decisions and deliver more value. 

Although historically procurement has really only had significant data awareness of first-tier vendors. This is as a result of less than perfect technology solutions. As these solutions become more sophisticated, it’s reasonable that procurement teams will be able to examine and streamline the vendors that sit below top tiers. Chief among these technologies will be the development of blockchain enabled tracking which will give power to procurement teams across the world.

Visibility, Velocity, Value, Talent And Agility

As 2022 progresses and the world hopefully moves towards a more surer-footing and away from the challenges of the last few years, it’s essential that procurement leaders focus on the five skills that we have outlined here. The leaders who succeed in this are likely to find that the rewards are greater, as competitors who fail are left behind in this tumultuous marketplace.