Erich Gampenrieder, global head of operations advisory and global operations center of excellence, KPMG International, says that 2018 will see procurement move further towards full digitalisation
This article originally appeared in the 2018 Trends Report.
In 2018, technologies such as blockchain, artificial intelligence (AI) and augmented reality will continue to disrupt procurement. But far from that disruption being something for functions to fear, it will open up a number of opportunities for procurement teams to grow and add value to their respective businesses.
The use of AI within procurement comes in many forms. While progress has been made around its use in robotic process automation (RPA), there is some way to go before functions realise the technology’s full potential. AI is currently used to help automate spend and analyse contracts but it can – and will – go further. This will help the function free up time and resource to focus on adding value rather than administrative tasks.
Blockchains will also become more prominent in procurement, as will the use of big data. The former will help the function gain trust, improve transparency and increase speed throughout the payment process. In terms of big data, companies will become increasingly familiar with analysing larger data sets, as well as creating new applications and information services such as supplier dashboards, which will also boost transparency and provide increased insight into the supply chain.
Blockchains and big data are part of the wider move towards full digitisation with the goal of helping to increase efficiency and add value through automation. This comes with its own set of distinct challenges, however, which procurement chiefs will have to face up to in 2018. The issues they will face on this journey will largely be centred on capabilities, planning and implementation.
Outside of technology, the function will continue to move away from its traditional focus of cost savings towards “value-focused procurement”. Innovation is a key value driver and to secure the full benefits of new ideas and technology, functions will need to create innovation ecosystems to help identify and leverage supplier-enabled innovation.
There will also be a move towards real-time risk management. This will see the function having to build closer ties with other functions including supply chain, corporate risk, compliance and sustainability.
To read more predictions for what 2018 has in store, Procurement Leaders members can read the 2018 Trends report.
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.