2017: The Year Procurement Gets Awesome

Aided by things like business networks, cloud-based applications and big data, procurement has begun to understand the businesses better, collaborate with customers and suppliers more efficiently, build trust with stakeholders and communicate the value that it can bring to the larger organization beyond just savings and efficiencies.

“Driven by new technologies, new talent and new thinking, procurement is reshaping business as we know it”

And in doing so, they have cracked open the door to the C-Suite. High-performing procurement organizations have earned their place at the table and play a more strategic role in running the business than ever before.

But the transformation is just beginning. Innovations that can make procurement awesome are fast emerging. Take the Internet of Things (IoT). It is estimated that IoT will add $1.7 trillion in value to the global economy by 2019. The World Economic Forum estimates that by 2020 the number of connected devices on the planet will grow from today’s 22.9 billion to 50.1 billion.

And it will have a profound impact on procurement as well. As Andrew Bartolini, Chief Research Officer of Ardent Partners recently wrote in the CPO Agenda, “IoT will transform the way that people, processes and technologies drive value through the enterprise procurement process. As a result of IoT, more procurement responsibilities and tasks that are largely tactical can be automated, enabling procurement leaders and line-of-business users to be more strategic. The IoT will allow procurement practitioners to ‘connect the dots’ faster and more efficiently throughout the procure-to-pay (P2P) process, which will only drop down into the weeds when there are exceptions (such as rejected expense reports or supplier on/off-boarding).”

With IoT, procurement professionals can compile data and analyze it to avoid business interruptions. And with powerful technologies like in-memory databases, they can make the kind of instantaneous decisions that mitigate risk, cut costs and bring added value to the enterprise faster than ever before.

And this is just one example. Don’t be surprised to see bots controlled by artificial intelligence mining historical transaction data and automatically ordering items before supply gets low without procurement needing to lift a single finger in the not-too-distant future. Or machines scouring intelligence from thousands of sources to detect the risk of forced labor in global supply chains and recommending actions to stamp it out.

As the pace of innovation continues to accelerate and things like machine learning, virtual and augmented reality and blockchains become more real, the stage is set for procurement to make another Quantum Leap. Procurement organizations that embrace these trends will continue tomove beyond simply lowering costs and driving process efficiencies and add broad value to their organizations. They will reap the benefits of true, networked collaboration between employees, customers and suppliers. And they will deliver innovations that drive real business advantage.