Proxima Blog

The Future of Procurement

  

 Email Article  

Tweet  

  

  

The 'Vision 2020' report is clearly a well researched and insightful piece of analysis by Ariba, but what does the future hold for procurement professionals?

I read the following quote from Larry Welch with interest "The spend management function will be very small by 2020, you will see a strong central core that does horizontal work - ensuring that all the right processes and tools, skills, relationships, templates, and performance metrics are in place across business lines and functions." However, most organisations simply don’t plan for a 10 year horizon and in today's economic circumstances are hungry for results right now.

I believe that procurement as a capability has some way to evolve in most organisations to understand and align to the core business objectives. To understand what value means to the organisation and ultimately how procurement can enable the acceleration to achieving this value. Silo mentalities should be abandoned for a more pragmatic approach that identifies what are the value generating activities and where the activity should sit, whether it is internal or with an external procurement provider.

The capability to support this vision from an external perspective exists today across a small number of specialist outsourcing firms - there is now a critical mass of high profile organisations that have taken the step to the next generation of procurement outsourcing. "Outsourcing", however not should be mistaken for the traditional transfer of business processes from one party to another. Outsourcing in this context is an integrated set of people, processes and tools that are specifically configured to meet the needs of the business.

Ultimately, as articulated in the report, we have an exciting journey ahead of us. The collective challenge is how much of this vision can manifest in a short, medium and long term? 

*Read the original report here: Vision 2020