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"Is this the end of procurement as we know it, or is there a Procurement 2.0?" was one of the questions posed at a recent procurement workshop in London attended by CPOs at multinational companies. Arguably, every procurement organisation lives by some kind of rule to deliver value to its company, and this value can come in many different ways. For many of us, it’s all about price. But as we become better at procurement, we also have to become more creative in how to deliver this value.
Recent research undertaken by the PIU reinforces this argument. In a poll of over 200 CPOs, we received confirmation of something we have long expected: as the function takes on more corporate spend and becomes more mature, it typically performs more of the same tasks and responsibilities, not just different ones. This pretty much applies to a wide spectrum of responsibilities, ranging from SRM to Demand Management, all the way to Green Procurement. Procurement does not relinquish responsibilities; on the contrary, it takes on more over time.
But perhaps the most challenging part of the procurement transformation lies in not operating in a "price mode" vacuum. For those among us who have world-class sourcing expertise and good governance morals, there is the opportunity to step into a business development role that allows us to modify the supply chain in a way that it delivers even more value. In fact, this gives us the power to grow with our suppliers, improve their capabilities and start seeing things that the wider organisation, let alone our closest competitors, may not be able to see. And for those among us who are still squeezing prices, it is time to think of different settings.