As we move towards a new decade, is the emphasis in the procurement world changing? Are we going to see a new age where the ‘Art of Procurement’ comes to the fore? Peter Smith, Chief Officer of Procurement Excellence and European Director, Public Spend Forum, deliberates the topic.
Much of our focus in the last 20 years or so within the procurement profession and within our specific procurement functions has been on what we might call the ‘Science of Procurement’.
The huge growth in the use of technology has been the most visible part of the developing picture. Over the years, we have moved from the first spend analysis initiatives, laboriously building Excel-based ‘spend cubes’, through to today’s automated, cloud-based, AI-driven, integrated, holistic (add your own buzz-words here…) procurement platform. Technology has radically changed procurement activities and procurement roles across virtually all spheres of activity.
Outside of the technology field, we have also seen ‘science’ come to the fore in terms of codifying processes, such as category management. There may be different models in use, but there is a pretty well-accepted logical methodology behind how organisations approach their management of major spend areas. Professionalisation of the function, logic and analysis have also extended into other areas, with a growth in relevant qualifications, all the way through to procurement and supply chain MBAs and even Doctorates.
But, as we move towards a new decade, perhaps the wind is shifting and thus we may see a different focus in the next 10 years. Is the emphasis in the procurement world changing? Are we going to see a new age where the ‘Art of Procurement’ comes to the fore, alongside scientific approaches? This term was used a few years ago by Philip Ideson, as a title for his website and excellent series of podcasts, and it feels like this may be an idea whose time has come.
However, we would stress that it doesn’t mean forgetting science and, of course, technology. After all, we’re only just beginning to see what AI and machine learning might do to revolutionise procurement and supply chain management; the possibilities are endless and hard to predict.
But we are seeing an increased focus on issues such as:
– How procurement can successfully influence, engage and collaborate with internal stakeholders to drive value.
– Procurement being asked to support the development of unconventional business models that move beyond traditional buyers/sellers (partnerships, joint ventures, large firms running start-up incubators, etc.).
– Capturing and exploiting innovation from supply markets and individual suppliers becoming a top priority for organisations and, therefore, procurement functions.
When we look at that sort of activity, we can see that it is very different from standard procurement processes – spend analysis, competitive sourcing, purchase-to-pay management, etc. These core tasks and issues are not going to go away, and we would not want to suggest that procurement leaders take their eyes off of those particular balls or stop trying to execute this work as effectively as possible! Adopting technology, automation and best-practice processes are not the ultimate objectives; they are a means to an end.
The emerging strategic priorities for an organisation require different approaches from procurement, different skills sets among staff and critical success factors such as creativity, flexibility, adaptability and even imagination that really starts to come into play. In addition, our expectations and requirements of technology must evolve as well to support not just rapid deployment of standard best practices, but the ability to bring our best ideas to life and promote agility.
So, this talk of creativity, agility and innovation all starts to sound and feel much more like ‘Art’ rather than pure ‘Science’, and it is interesting to see that technology firm Ivalua has titled the Ivalua Now 2019 conferences the ‘Art of Procurement‘. To support that, the firm hopes to challenge speakers to go beyond the usual ‘journey to best-in-class descriptions’ and include reflections on how procurement is embracing change in speakers’ organisations. How will procurement leaders contribute to generating real competitive advantage, to growing business revenues through innovation – supporting the top-line as well as the bottom line, as it were?
If procurement doesn’t change and widen its scope, we in the profession may face existential issues of survival, as technology advances further.