Big Future for Procurement’s Mandate5 Aug 2019
A traditionally binary function for driving percentage point savings – contract to contract, with boilerplate efficiency.
Purchasing spend management will of course always be important. But in terms of the bigger picture, opportunities for value creation which right now are increasingly presenting almost as existential, are just that – game changers that will help secure business longevity.
The scope of influence must surely widen – and not merely because of what has always been procurements essentially universal tactical mandate to source and save. We need to understand and appreciate new or emerging risk as well as new opportunity, to drive a truly strategic mandate.
Landscape or Landslide
Today’s changing world and its many challenges and tech advancements – urban population related sustainability as one example, rapidly increasing applications of IOT another, are happening so rapidly and with such high profile, that centrally positioning procurement to unlock and positively exploit advantage from within the next generation of supplier eco-system will surely mean that procurement can both influence and ensure that business of the future maintains the required edge.
The landscape is certainly changing. Supply chains are increasingly complex. Digitalisation – Business Intelligence Big data, AI, RPA, Machine Learning, IoT, Cyber Threat Management, to name a few; we can’t do it all, not on our own. Tech innovation is rapid. The need for nimble and agile partnerships is already growing exponentially.
What’s good for the Goose…
The market place is changing. Driven in part by an almost non-exception based expectation of on-demand flexibility, where business customers (closely following the trailblazing pioneers, i.e. their customers) don’t want to be tied-in to paying for services that they may no longer require next month of next quarter.
Subscription based Consumption is just Better
If you haven’t already, you’ll soon see the biggest shift across all sectors in terms of business contract engagement – from small boutique or bespoke product delivery right up though global managed service consultancy and manufacturing; eventually all moving away from traditional term-based contracts to subscription and consumption-based services. The financial modelling behind it is cash flow rich, initial investment is low, customer experience is massively optimised thanks to hugely disruptive digitised stakeholder relationship optimisation from solutions such as Suppeco and no industry sector is exempt.
There is an absolutely gargantuan array of change gaining pace around us: global warming and environmental sustainability, broad scope social improvement responsibility initiatives, new ways of embedding smart device driven intelligence within every aspect of just about everything that we consume across all sectors, and of course those very important commercial arrangements crafted to enable all of the above to come together.
There is so much change happening around us, we should not fail to see the opportunity that accompanies it. The mandate must look beyond finite opportunity for cost reduction. In fact it should serve to elevate procurement up the value chain where an infinite array of opportunity lives to influence and drive real value for business. It really is nothing short of driving change for the future.