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A Vision Of The Future III: Omni-Channel Spend.

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In this guest post, Procurement Leaders invites Doede van Haperen to look at the retail trend of omni-channel purchasing and how it might change the very nature of procurement by 2025.

The other day I posted a blog on a fictional day for a category manager in 2025. Claiming an important change in their daily lives when agility becomes the definitive power in procurement. The most important driver for this change is technological capability. In my previous blog post and this one I start explaining some of the most important changes that make this agility possible in procurement.

An important trend in sales & marketing, already appearing here in 2015, is the omni-channelling of product categories. Under the term “clicks & bricks” it was made clear that retailers cannot exist with only a webshop or only a physical store. This concept grew into much more detailed differences like combining own webshop with third-party reselling and instore with popup-store concepts etcetera.

Less physical, but still comparable, procurement is about to embark on a similar multi-channelling experience. How? I will try and explain.

Within IT, it becomes more common to differentiate in various system layers. The main split is in systems of record (your average current ERP-like system) and systems of engagement (front-end delivered to users). The gain from this new approach is found in a decoupling of functional optimal tooling (the user experience side) and process compliancy (executing the proper formal steps that are saved in the system of records). Translated to procurement, this means that various customer-facing solutions can lead to the same executed formal process.

The idea behind omni-channelling in marketing is that every product / market combination follows a unique set of characteristics in behaviour, location, interest and routine. Procurement is able to follow marketing's lead by leveraging the available technological options.

Where in 2015, channel-based procurement is only about various processes in one SRM-system, in 2025 there will actually by various systems (channels) available to support best-fitting processes and support per category. Process compliancy will still be a thing, the only difference will be the fact that a compliant process is one that checks the formal documentation in the system of records, not per se one that follows a fixed following order of steps.

An average example:

  • Hazardous materials can be processed through BIPP
  • Office supplies through Ariba
  • Direct materials are bought and planned via Oracle
  • Contingent workforce is handled via Nétive
  • …and all orders and receipts are processed from all various tools towards SAP MM to facilitate the follow on finance process on invoicing.

Between 2015 and 2025 a huge change in technological capability will gain momentum. Besides the aforementioned split of systems of engagement and systems of record, intelligent integration tools will create the possibility to easily combine various systems and even physical channels, into one administrative process. This will allow procurement category managers to select their best fitting tool, optimizing their spend execution, building an ideal world for their product category alone.

As you can see, technology and processing become more and more intertwined. When you want to build an agile procurement function that is ready for its business challenges in an ever faster changing business environment, you have to build a more digitally savvy procurement management. All the changes described for procurement operations in 2025 are already available.

Some are already in widespread usage in different business functions, some are more newer, but already usable. Start being savvy, start reading and preparing, the future is always faster than you think.

Doede van Haperen has been involved in P2P solutioning for more than 14 years. He runs the business consulting firm LAKRAN Procurement Professionals and software consulting firm AGAIN by LAKRAN.

This contributed article has been written by a guest writer at the invitation of Procurement Leaders. Procurement Leaders received no payment directly connected with the publishing of this content.

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