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At the World Procurement Congress 2017, procurement executives gathered to share their insights and experiences on the main opportunities and pain points the function faces today. Here are four key lessons we learnt from the discussions:
“Innovation is coming out of nowhere and at the same time from everywhere,” said Goran Cangl, head of ecosystem steering at communications company Nokia. According to Cangl, 70% of innovations are open, meaning they are not driven internally but come instead from external sources or "the crowd".
Procurement, he suggested, is at a point where it needs to leverage this open innovation or risk missing out on the next great ideas.
How can procurement leverage that innovation? At Nokia, procurement has developed a dedicated OPEN Ecosystem Network, which is centred around three cornerstones: data and contact democracy; technology; and a collaborative ecosystem.
At tech giant Philips, meanwhile, its open innovation strategy centres around procurement working with key stakeholders and aligning the whole organisation around specific innovation targets.
Talent and the challenges CPOs face around recruitment and retention was a key focus of conversation throughout the event, but there were some good examples of how different businesses are going about trying to solve it.
At Ericsson, the Stockholm-based communications firm, a ’talent board’ has been created, which reviews talent across the organisation in order to place individuals on the right growth path.
Siemens, on the other hand, has a different approach. The German conglomerate runs a cross-functional initiative to attract people from other functions into procurement roles. Both procurement and non-procurement professionals are offered opportunities in job rotations or secondments to other functions to gain skills in a variety of roles.
The challenges and opportunities in terms of digitalisation was widely discussed and Paula Martinez, CPO at UCB VP said that procurement chiefs needed to put a digital strategy in place and define a digital governance in order to secure the benefits.
Blockchain, artificial intelligence and machine learning capabilities were also explored in conversation and it was suggested that they will all help gather data and ensure the organisation stays ahead of the competition.
In the past, setting a multi-year business strategy was seen as critical, however, that view is changing and it s changing quickly.
Ros Rivaz, former COO of Smith & Nephew, explained that the rapid pace of change means that the concept of setting a multi-year strategy is the wrong move for procurement. What is relevant today will not necessarily be relevant tomorrow, she suggested. The focus of setting a strategy must shift and the function must broaden its strategic vision from an isolated functional view to a wider organisational approach and a global industry perspective.
This article is a piece of independent writing by a member of Procurement Leaders’ content team.