Future of Procurement Opinion This Week in Procurement

It’s Deja Vu All Over Again

I have spent a lot of time this summer thinking about the future of procurement.  

As part of our development of The CatalystCo Platform, we have been contemplating what skills will be critical for procurement professionals as the environment around us evolves; not just today, but over the next three to five years.

I haven’t been alone in reflecting on this.  

I’ve read a number of excellent articles this summer, and would highly recommend you check out Mark Perera’s article “Where I See Procurement in 2025”, and this video from Detlef Schultz, Chairman of the Board at the Vodafone Procurement Company (from 1 minute 30).

This week’s Art of Procurement podcast with Oliver Gall of S&P Global is another addition to the conversation.

Making Choices

An important choice we have as procurement professionals: do we take on this conversation as our responsibility, for our careers, for our community and for the organizations we work for?

Of course, exploring ideas and perspectives on the future will generate a lot of conflicting notions and there will be no easy prescriptions; either difficult to get clarity on or difficult to implement.

That being said, I obviously count myself as one of those that believe taking on this conversation is vitally important.

If I was to recommend just one action to start down the path of understanding where we may be headed, it would be to seek out somebody within our organization, someone who we know is skeptical about the value of procurement – perhaps a stakeholder, a leader, or a project team member – and use the 5 Why’s to engage them in a conversation about procurement’s value.

The responses we get will help us better understand the root cause(s) of why our contributions are not valued, or at least not seen in the same way as we view them.

Combine this newfound awareness with wisdom provided by the surveys and opinion pieces regarding the future of our profession and we have the beginnings of a roadmap to address those issues, both in the context of “now” as well as over time.

Leaving a Mark

And so it is against this backdrop that I eagerly downloaded a white paper published this week by Procurious: Here’s What Procurement Will Look Like By 2030

The report provides some interesting, but also conflicting data points:

  • 76% of respondents believe procurement will be a thriving profession in 2030, and yet a roughly equal number say that their businesses have either a moderate or little understanding of the procurement value proposition (so a lot of work to do there and a clear disconnect!).
  • The general consensus (51%) is that the future procurement operating model will be a group of agile business advisors (we agree with this – listen to this week’s podcast).
  • Half of our workload (49%) was self-identified to be tactical, and yet we believe that a majority of our tasks (58%) cannot be automated (another interesting disconnect).
  • And with all this taken into account (the lack of understanding of our value proposition, and an operating model that favors automation and smaller teams), only 9% report concern over job security (still another disconnect!).

In sum, we are foolish (?) optimists who believe procurement will thrive and we don’t need to be too concerned about job security as we evolve over the next 10 years, despite the fundamental structural changes that we believe will impact our profession!

And this is nothing new.

Two years ago, Gordon Donovan and I undertook a study to review “future of procurement” reports from the last decade (Days of Future Past: The Accuracy of Year-End Procurement “Predictions”). We found many projections in these reports and surveys on what the procurement function would look like in 2020 (and earlier) that could have been lifted from the surveys and reports being published today that are projecting out to 2025 and 2030.

There are so many examples to cite, so for the sake of brevity I’ll share just two:

  • A 2007 Aberdeen Group report shared that 75% of procurement teams’ primary focus was cost savings, but the future focus will move towards value creation over cost savings. Deloitte has reported on a similar metric in their annual CPO Survey.  In 2018, Deloitte reported that cost savings are the primary business strategy for 78% of procurement leaders.

Where did the focus on value creation go?

  • A 2011 Ariba report projected the key deliverables for procurement in 2020.  In short, they were: closer alignment between procurement and business strategy, driving supplier innovation, develop closer relationships with critical suppliers, and be the driver of organizational change.

If these deliverables sound familiar, they are essentially the same aspirational goals of procurement teams here in 2018. While a number of organizations have made tremendous progress in this direction, the fact that these are still the aspirational goals for our community makes those firms exceptions to the rule.

Returning to the Procurious report, the question that I am left with is this: what are we going to do differently over the next 10 years to transform our value proposition so that our profession is thriving?  What are we going to do to ensure that the 91% of respondents are justified in not fearing for the stability of their roles? What will we do so that in 2025 we are not reading reports that repeat the same aspirations as those in 2007?

Generating Fulfillment

Some questions to ponder:

  • How confident am I that my job is secure? Why?
  • What are the critical skill sets I need to own to keep my position?
  • What are the critical skill sets I need to own to advance my career?
  • How am I acquiring and maintaining the appropriate skill sets?
  • What is my strategic vision for procurement? For my career?

 

This is an excerpt from our weekly newsletter This Week in Procurement. Click on the box below to subscribe, and also receive a curated list of the most impactful procurement writing that our team has read each week, along with advanced notice of forthcoming Art of Procurement episodes:

About the author

Philip Ideson

Philip Ideson is passionate about the role that procurement professionals and leaders can plan in creating competitive advantage for their organizations in ways that go beyond the traditional value proposition.

Philip founded Art of Procurement as a way for the procurement community to learn from each other, increasing the impact they have on their organizations. In 2017, he co-founded Palambridge, a virtual platform of procurement experts, technology, and intelligence. Palambridge provides a broad range of flexible procurement solutions, available on-demand.

Prior to Art of Procurement and Palambridge, Philip enjoyed a career that spanned the procurement value chain, working across three continents for organizations such as Accenture, Procurian, Ally Financial, Pfizer and Ford Motor Company.