As featured on BusinessMirror: The Future of Procurement
Organizations are facing unprecedented change and disruptions that threaten their future viability. Inflationary pressures, expanding regulatory requirements, pricing fluctuation, an ever-evolving industry landscape due to M&A activity, and shifts to outcome-based pricing are all key forces compelling procurement leaders to re-evaluate strategies.
Amid continuous disruption, it’s time for procurement leaders to be the disruptors, bring the function to life, work across siloes, and shift its reputation from cost-cutting to customer-centric and business-enabling. This can be achieved with a wholesale transformation that engages executives and peers, allowing procurement to take on greater strategic responsibility.
Added to the global picture are rising geopolitical tensions, which are damaging and shifting supply chains, the economic hangover of the COVID-19 pandemic, as well as soaring costs driven by broader inflationary pressures.
How can procurement professionals navigate all this whilst also building a digital-first function that can support the wider business in their growth aspirations? Companies should challenge thinking and consider how they can rebuild the function focusing on the entire target operating model spanning the service delivery model (on and offshore), process, people, governance, data, and technology layers whilst driving the needs of the entire business, delivering sustainable value, and meeting regulatory compliance at the core.
Procurement needs a new perspective that is forward-looking, focused on aiming to maximize third-party relationships, innovation, integration, collaboration, and data-driven performance.
The CPO agenda for the future of procurement
Leading procurement organizations have developed an agenda to deal with disruption. They are moving into the future by becoming:
- Category innovators - Use deep supply market insights and predictive analytics to deliver on organizational needs.
- Customer-centric - Become user-friendly by delivering seamless procurement experiences and business compliance.
- Third-party centric - Drive supplier performance and take partner relationships to a new level.
- Sustainable - Integrate within the wider supplier risk and value chain agenda, while driving a social, sustainable agenda.
They are also enabling the future of procurement with:
1 . Platforms, insights, and analytics
How do you capitalize on data to drive work prioritization and deliver superior procurement experiences?
2 . The workforce of the future
Are your procurement professionals ready to become relationship brokers and data masters?
3 . An agile operating model
How do you restructure procurement to enable flexibility and a stronger connection to other parts of the business?
Where next?
It’s no longer business as usual for procurement. There are more disruptors at work than ever before – and they’re moving fast and at scale. The key to success is to develop a blueprint for how your procurement team can turn these disruptors into opportunities to grow and gain competitive advantage.
The excerpt was taken from the KPMG Thought Leadership publication: https://home.kpmg/xx/en/home/services/advisory/management-consulting/optimize-your-sector-operations/future-procurement.html