Top 3 trends that will change Procurement forever

Usage of Network (hyper-connectivity), Automation and usage of data are 3 trends that will heavily transform Purchasing. On my previous post, I have been sharing my thoughts why Procurement was lagging behind other sectors on its Digital transformation. Here, My intend is to highlight the top 3 trends that I believe will impact Procurement short term and change it forever. As you may remind, I explained how much this situation was driven by the lack of  collaboration between buying-companies and most importantly by the lack of a network critical size. To my eyes, inter-company competition has been the main root-cause preventing Procurement to go faster. if you think about it, competition and the fear of getting processes, data or knowledge stolen has forced companies to work alone in silos and with regards to Purchasing, to source, tender, procure and invoice on their own, without much collaboration with peers.

If protecting its current « way of working » to ensure competitive advantage remain a business key driver, 3 digital trends will no doubt change Procurement.  Forever and short term. Why that? simply because they bring at least 10 times more value than commoditizing current differentiators (best practices, methods and know-how):

Usage of Networks – Hyperconnectivity

Networks are representing an unbeatable value generated by thousands or millions  of users producing and sharing themselves the product or services they are using. Networks appeared first with C2C social networks in late 90’s, then in B2C where there was no competition between users. They will emerge in B2B as fear will disappear, as everything will be connected (IoT) and as benefits will be progressively obviously recognised.

Automation

Automation is a no-brainer for value creation. Since 1990, simple process automation enabled hands free procurement transactions; automation is currently growing exponentially with the rise of Artificial intelligence everywhere and the availability of more and more data for proper contextualisation.

Usage of data & Analytics

Data are progressivelly bringing unique business visibility and new capabilities that will become tomorrow unique differentiators for the business. So far, data were available but not really used; trend is now to exploit any corner of databases and even to increase the number of data-captors to identify new opportunities for improvement either by

  • triggering alerts / notifications to save time and money solving issues,
  • contextualising data to enable ‘next step decision’ automation,
  • Fixing issues revealed by data analysis through specific Apps,

The table below illustrates those 3 trends further and the way we can think they will materialised:

networkspNetwork
automatespAutomation
insightspBusiness Insights
Emergence of collaborative Procurement Networks(s) (ex:Linkedin dedicated to Procurement professionals) – enabling users to have all information they need per category and supplier in their daily work,

Specialised business Apps plugged to the platform to unleash additional value (speed, news, insights etc)

Enablement of inter-company collaboration between buyers of the same categories

Fremium and Pay per use business models as Linkedin
eProcurement becomes like Amazon – suppliers and products and services are easy to define, to search, to compare, to rate

Contextualisation of data (matching & aggregation enrichment) enables additional searching and pricing efficiencies

Voice and cognitive computing is enabled (example: SIRI)

Standard configurable P2P processes, adapted to each category, are enabled on the cloud

Continuous improvement based on users feedback / rating and Apps developed by the crowd
Data becomes the black gold for efficiencies and competitive advantage

Contextualised data provide Visibility and Insights as never ever

Automated reports and dashboards are coming with Recommendations

Next step decisions are automated thanks to insights and standard business rules

Enablement of Inter-enterprise benchmarking and rating

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