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Procurement set to grow its influence in 2019

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Predictions for 2019

As we edge towards the Christmas break, thoughts inevitably turn to the New Year and what that will bring. Having spent the majority of 2018 speaking to and listening to what our members view as opportunities and challenges, I asked the Procurement Leaders team here for their thoughts on the trends that would shape the function in 2019.

 

Here is what they said:

 

Nandini Basuthakur, CEO: "From my vantage point in speaking with members, partners and our advisory board, I believe 2019 will see procurement being increasingly recognised as a critical integrator within the business but also a value generator. I believe that will happen in the following areas:

 

Data: Procurement will continue to make smarter, more informed decisions (using real-time data, predictive analytics, blockchain applications and artificial intelligence) to move their businesses forward.

 

Collaborative and connective agility: The opportunity for the function to become a pivotal collaborator for the ecosystem of suppliers, customers, partners, talent pools and stakeholders will also increase as change and uncertainty continues to shape markets.  

 

Economy, environment and societal good: Procurement will do more good by becoming the custodians of brand and corporate reputation through ensuring sustainable and transparent supply chains."

 

Errol Rasit, chief innovation and product officer: "2019 will be the year of digital achievement. Will procurement solve all of its data cleanliness issues, or build the ultimate artificial intelligence capability to solve resource issues? No. But it will identify areas of benefit to help outpace the needs of doing business in an accelerated world.

 

How will this be possible? Procurement has the ultimate vantage point, the 360-degree view of the value chain: the business, the customer and the supply chain. Because of this purview, the function has the ability to solve a range of issues.

 

Procurement will use technology to activate its network, drive cost savings, but more importantly focus on outcomes that deliver value beyond cost savings – ultimately achieving greater customer satisfaction."

 

Roseanne Spagnuolo, head of research and insights: "I believe we will see the CPO-CEO disconnect narrow in 2019.

 

As global growth continues to slow down and protectionist measures are enforced by the largest economies in the world, CEOs will be looking for new and alternative ways to grow the top line and remain competitive.

 

Embracing emerging technologies and building digital capabilities are in the CEO’s immediate toolbox to drive innovation and growth. However, there is more that can be done to unlock value in the organisation. Mindful CEOs will start to challenge and ask questions of procurement and supply chain operations. There is latent value waiting to be activated here, especially in global supply chains that tend to be opaque and complex.

 

The disconnect is that CEOs don’t necessarily understand procurement’s spectrum of capabilities and how it can deliver enterprise value and not just cost savings. That value can come from innovation, capability development, protecting IP or even acquisition strategies. CPOs must be prepared to lead these discussions and bring relevant forward looking and prescriptive insights to frame the potential opportunities. This is procurement’s olive branch to the business and the start of the function #DoingSomethingDifferent."

 

Steve Hall, director of content and community: "2019 will be a year where supply chain risk is very much in focus. When the last global financial crash happened, procurement was forced into the spotlight: those teams needed to have answers about which suppliers were financially vulnerable; where price rises would hurt the bottom line; and how global sourcing strategies would need to be configured to optimise savings from low-cost country sourcing.

 

But, as opposed to 2008, a more complex picture of global supply chains has emerged. Today procurement has greater influence across many industries and, perhaps more importantly, more digital capability to affect change.

 

I predict businesses will place an emphasis on procurement’s ability to use data to identify and respond to a more complex notions of supply chain risk. Panic often accompanies uncertainty and procurement will need to be a reliable source of information to help their colleagues understand where they’re taking on risk, and what the alternatives are. Procurement will have to be at the forefront of that shift, particularly if macroeconomic scenarios lead to the shortening of supply chains. This is the year it will demonstrate the capability to lead organisational change."

 

Jon Webb, head of content and advisory APAC: “Much of 2018 has revolved around responding to the rising uncertainty of new technologies, new risks and new markets. For some years – perhaps decades – we have seen procurement worry about its place in the world. With each new development, the role of the buyer has become fuzzier and executives have debated about potential pathways forward.

 

I think in 2019 much of this fog will clear. If the past has taught us anything it is that as technology increases in power, the importance of relationships rises. As procurement professionals, your role as a facilitator is growing ever more pronounced and formalised in the business. Already, we are seeing business partnering positions – full-time mediators of value between the business, procurement technicians and suppliers – introduced in many experimental organisations. 2019 is likely to see a proliferation of these roles, but also other procurement specialists: supplier relationship managers, risk managers and even supplier innovation scouts. All these roles will serve to connect communities together and grow value from these relationships.”

 

So, there you have it. Procurement’s influence will rise as it helps the business drive growth in an era when it is contending with a range of challenges.

 

From us here at Procurement Leaders, happy holidays. We look forward to seeing what the function can achieve over the next 12 months. 

Tim Burt
Posted by Tim Burt

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