Procurement Mega Trends 2025 – GEP vision

GEP, the company who’s mission is “to provide customers the most creative, most effective and highest value end-to-end procurement and supply chain solutions” , just released a white paper about her vision on Procurement in 2025.

In this white paper called “Procurement in 2025: Five Megatrends & Their Implications“, GEP is disclosing 5 predictions for the next decade.

  1. Shift from External Procurement Focus to Supply and Operations Management Focus.
  2. The Proliferation of Incremental Savings Realization.
  3. Outsourcing Becomes Acceptable, Delivers Incremental Value.
  4. Vendor Management Office Leads as Best Practice.
  5. Procurement Becomes Central, Shared Service

Not sure the titles are speaking by themselves but I definitly recommend reading this white paper as it successfully triggers thinking and it challenges own perception.

My remarks on those 5 trends would be as follows:

  1. This is not new: Best value is not coming from 1 process component but from an end to end optimisation, especially in a Supply Chain Process (Direct Spend). However the disconnect between Category management and Procurement (replenishment) has always been a weak point difficult to solve as Category Managers were missing Analytics and ability to enforce or measure the different dimensions of compliance (Turn around time, price, SLAs, End-User satisfaction…). I believe that our growing ability to manage big-data in the near future will dramatically improve the end to end process.
  2. Pro-li-fe-ra-tion of Savings? Aha, that’s teasing!  – No I don’t think so. I rather believe Purchasing organisation will enhance their  ability to bring compliance  at levels never acheived before and again, due to Analytics and big data capabilities, hence continue to be able to generate 4 to 5% savings vs total indirect spend, year on year.
  3. Shall I use my joker, as I’m part of the game as GEP is? let me just confirm that indeed, the trend in Outsourcing is not to do same on behalf but to commit to do better and cheaper on behalf of (…), combining Expertise and skills, Technology, global footprint etc…
  4. Will Vendor Management office be setup in Best in Class companies? Sounds to me like a preparing a buzz. why to create a new function? isn’t it already part of the role of a Buyer to manage key supplier relationship, performance and compliance to contract? What I believe here is that indeed we’ll see great progress in commodizing vendor management throught New online application accessible from mobile devices.
  5. Not new but true, no doubt, the trend is mega-strong for centrally managed Purchasing organisation. However in any case you’ll need local representation to manage with local one-off requirements…

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