2019 marks 20 years in the Procurement profession for me, punctuated with a few breaks. I am both proud and alarmed by this in equal measure. I have recently returned to work after one of these short hiatuses. Every time I come back I wonder whether I’ll suffer from re-entry issues. What has changed? Will I be behind the curve? Will my skills be out of date? Worryingly, I have never needed to worry.
When I secured a place on an airline graduate scheme back in 1999, it was called purchasing – a term that has slowly been phased out for fear of being painted with the ‘transactional’ brush. Fast forward 20 years and that brush is still looming like a dark cloud over the function. I have had many conversations recently about whether we should ditch the name ‘Procurement’ for the same reasons we cited two decades ago. We may have moved on from purchase orders and goods receipt notes, we may now want to be called ‘Commercial’ and we may even throw in the words ‘strategic’ and ‘agile’ every now and again but the reality is, our evolution has been slow. The future of procurement is behind us.
To put our rate of progress into context for a moment - just over 20 years ago, we could only buy books from Amazon. 10 years later, Amazon Prime was launched and in 2018 it exceeded 100million subscribers - and most of the books are now digital.
Of course, CRM advancement is on a different timeline to Procurement (although some may question this now that Amazon has dipped its very large, disruptive toe in our space) but, as a function, it is still dominated by process, and manual ones at that. Very few are fully automated. Strides have been made at the more transactional end of the spectrum and certain manufacturing and automotive direct categories have harnessed technology. But the fact remains that, hidden behind activity that is increasingly perceived as low value, there is a function that the business is frustrated with, perceiving it as mere gatekeepers and that may soon be overtaken with the convergence of AI and RPA. According a recent study, 46% of us do our food shopping online. This desire for ease, speed and self-serve is just as prevalent in business and even the big players – Ariba, Coupa, and IBM have struggled to scratch the surface.
But I have hope. I see a silver lining. The threat of extinction is just the impetus Procurement needs to re-purpose itself and emerge from behind the processes and policies. Attention should be drawn to exploiting the function’s unique external market knowledge, deepening supplier relationships to gain competitive advantage and strengthening analytical capability to provide clarity, structure and insight in a data-flooded environment. All this will require our profession to think about how we attract the next generation, how we build different skills and how we recruit talent from a new pool; awash with story-tellers, network knitters and relationship managers. But I’m quietly confident (and hopeful) that the next time I return from a break, I will have major re-entry issues.
Over the coming weeks, we will be building on these themes in a series of blogs that explore what we think the future of procurement should look like and why now is the right time to transform the profession.