The Future of Innovation in Procurement envisages tomorrow’s procurement functions, trends in procurement technology, as well as how this will impact organizations opportunities. Given the swift advancements in digital technologies, business supply chains are undergoing some disruptions, which are perched to change how the procurement function provides value.
Nevertheless, the question regarding what the future holds can create some degree of uncertainty for the procurement function. Business executives are looking to procurement function to assume a wider and greater set of strategic duties than ever before. Likewise, organizations are confronting unparalleled shifts and disruptions that threaten their future sustainability.
So, What Exactly Is Behind This Shift In Procurement?
There is only one answer to this: Digitalization. In an environment where most of the procurement experiences are accessible at the click of a button, both employees and consumers are not inclined to agree to long delays and burdensome processes.
Future procurement organizations will have to progress from procuring and sourcing, to facilitating a flawless digital experience. Organizations, consumers, and suppliers alike require a seamless integration, which would be facilitated via digital programs, agile working models, E-Sourcing, prominent workforce capabilities, and extreme analytics to play in this niche in the future.
Defining Innovation In Procurement
Procurement can serve as a strategic policy tool and a service function that can help you in realizing wide-ranging economic and social welfare goals. It can penetrate different sections of public administration and foster collaboration among numerous private and public stakeholders.
So, for your procurement function to be efficient, it needs to be innovative. Fostering innovation in procurement involves all the practices that are effective, transparent, and enable the same access and free competition. Integrating innovative solutions to your services is crucial to offering improved services with enduring value for money.
Top Trends Shaping The Future Of Procurement
Having said all these, what then are the top trends of innovation in procurement?
Advancement in technology allows for more digital and physical inputs to be integrated, enhancing efficiency, guiding better decision making, and at the end of the day, it generates better results. According to Gartner, there are four trends that shape the way businesses conduct their operations, which is the “nexus of forces.”
This describes the convergence of social, mobile, cloud, and information patterns, which has become the framework that drives digital business.
Likewise, in an environment where supply chain risk is a top priority for nearly all electronics consumers, technology will continue to play a vital function in alleviating this distress. What this means is that several companies will have a 360-degree perspective of suppliers through market data, internal data, external data, and data from suppliers on suppliers’ performance.
Moreover, the emergence of innovative technologies, like 3D printers, and the necessity to push the competitive advantage, will disrupt the current situation around make vs. buy.
Robotic Process Automation (RPA) will soon be a fundamental feature of any commercial off-the-shelf (COTS) operation. This would minimize the impact of unending extensive software upgrades. According to EY, manual reporting will soon become a forgotten activity, and workers will be allowed to concentrate on business-critical operations, rather than wrestling with paperwork.
Future procurement will be encouraged with flawless and intuitive procurement experiences, irrespective of the basic technology systems available. This would mean that voice-activated and bot-purchasing experiences would soon be the usual practice.
Moreover, when automation is fully implemented, high degrees of automation and assimilation along the supply chains will offer real-time insights and complete transparency. What this suggests is that procurement in the future will be genuinely user-driven, rather than office-regulated.
Cloud Computing Trends
Blockchain Technology Trend
Without a doubt, one of the most significant features of a blockchain is its capacity to enable better visibility and trust. If you have been following investment, banking, or cryptocurrency trends, you should be familiar with this hot buzzword.
While there might be some initial uncertainty to applying private blockchain networks based on the expenses of deployment and development, inserting this technology across procurement applications and business networks will no doubt quicken the facilitation of faster, smarter, and more transparent supply chains.
Application of blockchain may possibly be restricted to situations where there are high levels of counterfeiting, a supervisory track-and-trace constraint, or a transparent business case for operational integrity. Since blockchain technology is powered by transparency and consistency, there will be more highly secure audit trails.
Where Do We Go From Here?
Definition of nexus of forces – Gartner information technology glossary. Retrieved from (Gartner)
EY Global. (2018, October 29). Ten trends shaping the future of procurement. EY US – Building a better working world. Retrieved from EY
The Future of Procurement in the Age of Digital Supply Networks. (n.d.). Retrieved from Deloitte
The future of procurement technology. (2016, March 18). GEP | Procurement & Supply Chain – Strategy, Software, Managed Services. Retrieved from GEP
Vollmer, M. (2018, August 1). How will Blockchain impact Procurement and Supply Chain? Retrieved from Medium.com