02.1 / The future of Procurement is NOW!
As a Procurement practitioner for years, I believe that Procurement is a key function in any organization. Yes, I am probably biased, and so are the other practitioners, writers, bloggers, researchers, and consultants… who say the same thing.
I am sure that people who work in departments other than Procurement may think the same of their own function’s role and, to be fair, it is clear that there are many other key roles in companies. Sticking to the analogy with species, companies are like an eco-system and several species coexist to ensure that they survive and thrive. Like in nature, they are interdependent. Like in nature, the disappearance of one may threaten the whole eco-system.
Nevertheless, Procurement has a key and specific role: connecting the inside to the outside by providing a company with the inputs (supply) it requires to:
- produce whatever his product / service is
- simply be able to function
And I believe (the discussions on Social Media, the articles on blogs, and the books published that say the same thing show that I am not the only one to think that) that the strategical role of Procurement is still under estimated. Unfortunately, this view of the position of Procurement is still “marginal” and Procurement is still too often relegated to a pure administrative role. The misconception and misunderstanding people have come from:
- the way people (in and outside of Procurement) see the role of Procurement,
- a short term view of the world and of their own environment.
Procurement is not anymore about supplying what my organization needs today. It’s about preparing my organization for the challenges of tomorrow!
If you look at the statement above in the context of an ever changing world, world changing at an ever faster pace, then you start to understand that Procurement’s role is about the survival of companies. You also start to see the type of value it can bring.
So, in order to:
- Contribute to the debate / discussions on positioning Procurement as a strategic function,
- Enable Procurement practitioners to understand what their true value to companies is (and to enable companies to understand the true value they should get from their Procurement function),
- Help Procurement, as a function, to build the right capabilities to survive as a function,
My “essay” will focus on the 3 points below:
- We live in a disrupted world… (Part II)
- Procurement is key for companies to survive in this disrupted world… (Part III)
- Procurement technology is (or should be) a key enabler for the survival of Procurement (Part IV)
I must give credits to several people and sources who are the inspiration of some of the ideas I will develop; they are listed below. My “essay” is a remix of some of their thoughts. I transposed some of them to the Procurement world and added my own observations & experiences from my time as practitioner and as evangelist of Procurement technology.
“ An overriding focus on purely or financial short-term performance will definitely not lead you to your procurement mojo..”
Credits & acknowledgments:
- Presentation by Christian Lanng, CEO of Tradeshift:
- Book: Leading digital
- Book: The 2nd machine age
- Book: The Procurement value proposition
- Book: Procurement Mojo
- Recent article from The Hackett Group: The CPO Agenda: Procurement’s Key Issues in 2015
- State of flux’s article about Supplier Experience
- and many others…
