The conclusions from this year’s World Procurement Congress felt very different to last year, which ran with the theme that there will be no need for procurement people in the not-too-distant future. Here are our take-aways.
There were consistent and familiar themes (technology, digitalisation, talent, partners) but 2018 felt more grounded, more ‘in the now’, more focused on today’s solutions. And certainly more focused on the role of people.
Here are the three key nuances we took away, and why we think they are so important for procurement professionals today.
1. To move forward with digitalisation requires a step back
There was strong recognition at this year’s conference that for digitalisation to be successful, you need to take a step back and ask: what is the specific business problem that requires a digital solution?
It’s easy to read about a new technology, or a new start-up software, and think you’ve found the holy grail. As an example, one of our large CPG clients was struggling with implementing a new SRM tool. In a workshop with senior stakeholders and users, we discovered there was no organisation-wide definition of Supplier Relationship Management, therefore no common understanding of the problem this tool was designed to fix. A classic way to ensure a project will fail!
And the workshop flagged up a second key point about digitalisation – the importance of people as part of the process. Technology effectiveness requires user effectiveness – which means users who understand the business objectives, engage in the process, and ultimately see the benefits.
Start with the problem you want solved, then find a technology to solve it. Too often people get carried away with exciting technologies.
Hans Melotte – EVP Global Supply Chain, Starbucks
2. Innovation needs innovating
The past few years have seen innovation become compartmentalised, siloed even. But this is now evolving into a realisation that innovation needs to be part of everyone’s job, part of the whole culture, and most importantly, part of your external engagement strategy.
Ideas and innovation can come from suppliers, from customers, from society at large; shifting the focus from internal to external vastly extends the available sources and resources. Airbus quoted a great example of transformation – moving from a 1,000-strong Corporate Research Centre to just 200, with the smaller team collaborating far more with external partners.
Again, a key component here is that innovation is about people, not just process or technology. We see among our dynamic client base that it’s supplier engagement not supplier management, that brings new value into their businesses.
Open innovation platforms, such as Bayer’s Thrive and Nokia’s Open Ecosystem Network, are signs of the future of procurement.
Tom Seal – Research Director, Procurement Leaders
3. The ‘win-win-win’ case for sustainability
The CSR agenda has come increasingly into the scope of procurement and supply chain functions, with the understanding that companies can no longer turn a blind eye to their Tier 3 or 4 suppliers. And in the wider business world, ‘ethical investing’ is growing in popularity for good reason – returns.
But what we heard from Mars is really a game-changer. Going beyond the principle of sustainability to mutuality – the idea that business relationships can be measured by the degree to which mutual benefits are created. And Mars has taken this into the real world, with five live projects – five very different projects – in which the business case for sustainability has been clearly proven.
And back to the human factor: people empowered to challenge the status quo and try different things, combined with long-term vision and commitment to collaboration, can deliver real change and tangible results.
Mutuality matters: Mars is working together with farmers to lower water consumption and drive growth but in a win-win way for customer and Mars.
Barry Parkin – Chief Procurement & Sustainability Officer, Mars
Humans or robots?
What is clear is that procurement professionals are not going anywhere in the foreseeable future. For sure roles will change: new skills will be needed, others may become less prevalent. And technology, tools and automation will have a role to play in that – but will not replace the human touch.
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Alok is a research and analytics executive, and a business leader with 15+ years of experience across industries and functions. Based out of our London headquarters, Alok leads the Industrials, Manufacturing and Consulting practice in Europe. With his experience in owning client relationships and managing delivery, he is always keen to understand clients’ business challenges and design bespoke solutions to deliver the maximum value. He loves spending time with his two young kids, and recently started cycling and playing tennis.