“Procurement is going to make a transformative leap. It may be in a year. It may be in three years. But it’s going to happen. So start experimenting.” – Remko Van Hoek, Full Professor of Practice SCM, Executive Director CSCMP Supply Chain Hall of Fame, hosted by Walton, University of Arkansas - Sam M. Walton College of Business
Remko Van Hoek has what you might call a 360 degree view of procurement. As a practitioner, procurement executive, consultant, and now professor at the University of Arkansas, Remko’s perspective on the future of procurement is informed just as much by his own leadership experience as it is by data.
This unique vantage point makes Remko’s research on “10X Procurement”, which was conducted in partnership with DPW, particularly compelling, and I was fortunate to be able to speak with Remko about the results as well as his predictions and recommendations for procurement at DPW in Amsterdam last fall.
The survey gathered insights from over 200 practitioners, procurement leaders, and solution providers, and it revealed interesting insights about how technology – AI in particular – is transforming nearly every aspect of the profession, from procurement’s operating model and skill set to their role in the business and potential for impact. It also revealed how AI and digital transformation are injecting opportunity, value, and, yes, even fun back into procurement.
We covered a lot of ground in the conversation, but here, in Remko’s own words, are some of his most important takeaways from the survey and recommendations about how procurement can find new, innovative ways to 10X their impact during a time of significant change and transformation.
On the Fear of AI Taking Over
"The bot will replace the buyer that doesn't embrace the bot. Try to ban the bot and you will be automated away. Embrace the bot and move forward."
On Attracting Top Talent Through Digital Innovation
"I was meeting up with one of my friends who we've featured in one of our articles about digital procurement before. And he shared with me that he's been seeing candidates for openings in his organization come through the door, referencing that article about his organization and saying, and they found it so cool and that’s why they want to apply.
But, you better have a good digital answer if you want to compete in the scarce talent market. Don’t be fooled by the ‘shiny new thing,’ but definitely use the shiny new thing to get talent through the door."
On Moving Beyond Traditional Metrics
"Spend compliance is just the worst possible term because it makes you sound like you're the police. And if you're not in compliance, they're going to tell you how much of the company's money you wasted. For me, spend compliance is a quality indicator. If it's low, then your strategy was wrong."
On Real-Time Data Revolution
"I love spend analysis, but historically, that's been pulling rearview mirror AP data, crunching it in spreadsheets for a long time and going in with the pie chart. The 10X movement talks about dashboards that are real time. Can you tell me not how much we spent last year but how much we are spending today?"
On the AI Adoption Explosion
"Only one in five can report that they've started to adopt [AI], maybe have adopted, maybe have scaled... But there’s also been a 187 percent increase in companies that plan to be adopting, rolling out, and scaling AI in the coming year. So that leads to the statement, procurement is slated to look very, very different the next time we see each other."
On the Myth of Universal Solutions
"Part of what will keep us in business and what will keep this fun is, I truly believe there's no universal solution in procurement. There are lots of practices and tools and techniques that are very transferable, but there's no universal solution. Therein resides the ‘art’ of procurement."
On Moving Beyond Standard Processes
"With the focus on standardizing processes, that also came with expensive technology. It was big, and it was like we're putting a big fat platform in that everybody's going to use... Those were heavy lifts. Some of the newer technology doesn't have to be expensive to get started. It is not hard to start experimenting and to begin to learn."
On Procurement's Unique Position for Digital Transformation
"The reason why procurement is well positioned to get to a 10X kind of operating model is that we spend time selling every day. We spend time engaging our stakeholders. We spend time selling our suppliers on why they need to engage in our process, why they should think of us as a customer of choice. We are, by definition, in that ecosystem all day long."
On Learning from Failure
"Leaders also fail. They also try things that don't work. And they may not want to publish it. Because we like to talk about our success stories more than our failures. And that's okay, we can still learn from it."
