My Dream - The Future Procurement
By Michael Koh, Head of Procurement, T-Systems
Information technology has reshaped the way business is done. Information technology is a key to firm competitiveness. Technology through mass networks of computers, internet and mobile devices has created zero distance with the users. Once every device is wired up and connected through internet, it creates opportunity for individual who dare to think outof-the-box and dream to discover unmet customer needs. Accordingly to Wikipedia, Amazon.com went online in 1995 selling books, and Jack Ma found the website Alibaba. com in 1999. Amazon issued its initial public offering on May 15, 1997 trading in NASDAQ as AMZN at a price of USD18 per share. In 2014, Alibaba Group Holding’s initial public offering poised for a record stock market debut with shares priced at USD 68 that valued at USD 25 billion. These companies are made news because of somebody dream, someone see it happens, make it happens and that’s why we are experiencing it now.
As a six sigma practitioner, I look at the ‘As-Is’ and ‘To Be’ of future Procurement. It is extremely helpful to build new enhancements or make business process improvement that measuring the three variables of productivity, quality and timeliness captures the essence of group performance.
"Web based technologies enable and match buyers order to sellers offer, delivery and service receipt, and payments are all done in cloud"
What is ‘As-Is’ Today Procurement?
We have many roles. We are an order management expert of ‘procure to pay’ system. We partner with legal and sales leaders in contract management of back to back requirement. We lead internal matrices on supplier performance.
We source the right suppliers that meet our engineering specification. We use data transparency of the organization spend and demand of third party products and services to strategize, rationalize the supplier base and manage the supplier relationship etc. We are being measured by cost savings, cost optimization, on time delivery, quality of products and services receipt, internal customer satisfaction and time to market from getting quotes, generate purchase order from purchase requisition raised. Today, procurement is known as a cost centre, we engage in dialogue rich discussion to enable all of the above and more.
In the future, perhaps, artificial intelligence will categorize and classify requestor free text demand in email with ease, maybe voice recognition system where requestor purchases are converted automatically into a RFQ, and save many man hours of work in getting an order into the Procure to Pay system. Web based technologies enable and match buyers order to sellers offer, delivery and service receipt, and payments are all done in cloud. All these are done real-time 24/7 by software defined networking. Technology enables both buyers and sellers to use a standard rating system to rate each other performance. It is no longer the buyers having the right to rate the sellers. It is no longer true that customer is always right. This resulted in more collaboration where buyers and sellers will pool their talents together on products, services, manpower, expertise and new ideas offer. This raise innovation and productivity to a new level for imagination. This is very possible. According to A.T. Kearney (2015), retail e-commerce has grown nearly to USD 840 billions in 2015 surpassing the sales of USD 695 billions in year 2013 and it was estimated to increase to USD 1506 billions in 2018, as online retailers continued expanding to new geographies and physical retailers entered new markets through e-commerce.
What is My Dream of the Future Procurement?
“The future procurement professional sits on a myriad of data connecting the organization to external. We are the data scientists that draw business intelligence out from the mass amount of data. We architect the business processes for software defined networking. We train our internal stakeholders to be smart buyers. We become a professional problem solver across department and lead business improvement as a champion. We influence the buyer decision, and the seller behaviour. We are influencers. No matter how we change. We have to quantify our efforts with Balanced Scorecard, and management accounting technique, to translate the strategy into operational terms, make strategy every-one’s everyday job make strategy a continual process and mobilize change through strong, effective leader-ship,” quoted by Kaplan and Norton. Maybe, Procurement will become a profit centre and drive innovative initiatives from portion of the saving that we optimize for the organization. Quoted from our founding Prime Minister Lee Kuan Yew, “There is a glorious rainbow that beckons those with a spirit of adventure... To the young and not too old, I say, look at the horizon, find that rainbow, go ride it." Chase your dream!
T-systems’, headquartered in Frankfurt am Main, Germany, offers secure operation of legacy systems, classic ICT services, transformation to cloud-based services and new business models and innovation projects.