Top 10 trends shaping the future of procurement
The procurement landscape is changing.
The Internet of Things (IoT), machine learning (ML) and artificial intelligence (AI) is having an ever-increasing influence on how companies operate. EY, a leading consulting firm, has released 10 trends that are defining the future of procurement over the next few years.
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10 | Procurement’s contribution to the overall organisation strategy will be a major driver for competitive advantage
Leading procurement functions will form part of an organisation’s value stream and will be more influential in contributing to the overall business strategy, growth agenda and competitive advantage. Their remit will be increasingly expanded to focus on cost leadership and enabling innovation, agility and supply certainty.
9 | Procurement will be a smaller, more agile function that partners directly with business units
Soon, procurement will be a smaller, centralised function, with more happening in a virtual centre and with people geographically embedded within business units.
8 | Machines will mostly clean and curate their own data
Over the next few years, data will be continually cleansed and improved through machine learning techniques that embrace process outcomes to automatically identify and remedy data anomalies within systems.
7 | Integrated data ecosystems set to accelerate visibility of patterns across the organisation
IoT will enable real-time tracking and monitoring of outcomes through continuous feedback loops across assets. The industries will link the data across the enterprise and connect to suppliers, enabling touchless procurement in the upcoming years.
6 | Organisations will leverage internal and external data sources to better assess supplier risk
In the near future, all organisations will have a 360-degree view of suppliers through internal data, supplier data, market data and external data on supplier’s performance.
5 | Robotic process automation (RPA) will be ubiquitous and will become an integral part of any COTS deployment
RPA is set to be an important part of any COTS solution deployment, therefore, reducing the impact of ongoing wholesale software upgrades. By now, most procurement functions have fully enabled end-to-end procurement models, where manual intervention for high-volume repeatable tasks is removed.
4 | Commercial off-the-shelf solution providers will open up their architecture so that third parties can develop and sell apps and software that enhance functionality
The mobile app store experience is set to be available to the business world with commercial-off-the-shelf (COTS) providers, which allow access to third-party apps and software. Existing CITS providers will focus on the development of core product functionality, while specialised capabilities will be left to third-party providers, such as order collaboration, payments, digital signing and supplier surveys.
3 | Voice-activated and bot-purchasing experiences will be the norm
Buyers of the future are set to be supported by seamless and intuitive purchasing experiences, regardless of underlying technology systems in place.
2 | Blockchain to be selectively used in procurement
Despite blockchain being used as a matter of course, it is selectively utilised by procurement functions. Due to the cost of introducing private blockchain networks because of the cost of development and deployment, there is likely to be some hesitation. However, blockchain will most likely be limited to scenarios where there is a regulatory track and trace requirement, a high level of counterfeit and a clear business case for operational integrity.
1 | Existing decisions on make vs. buy will be challenged
Due to the prominence of new technologies such as 3D printers and the necessity of driving a competitive advantage, the current status quo centered around make vs. buy is set to be challenged. There remains an importance to understand the tradeoffs in reducing production downtime and costs as well as improving sustainable practices by making products instead of buying.