Where is Procurement headed?

Procurement is changing. Fast. If you want to know what’s up next for Procurement, keep reading...

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Thursday, September 12, 2019

Procurement is changing. Fast. If you want to know what’s up next for Procurement, keep reading...

One of the best parts about our job is the opportunity we get to see how world-class procurement organizations are tackling the challenges they face. Many companies have similar issues so it’s a good chance for you to learn from them just like we have. 

Procurement is changing. Fast.
The job of a “buyer” as we’ve previously known it has changed from buying goods, to buying services, to buying solutions, and has now arrived at being the main driver for supplier innovation. A buyer today is expected to drive value to the business by cost-reduction as always, but now also by creating additional value to the business in partnership with suppliers on new ways of doing things, new products, new materials, new kinds of packaging, etc.
The days of the traditional “buyer” are waning to be replaced by something much more strategic, specialized and difficult but which also delivers much more value than traditional buying activities.

Read more about the trends of Value-creation in Procurement.

AI, Automation and RFP's
AI seems to be everywhere. The real question is how AI can automate more or entire processes of knowing when to go to market with an RFP, build an RFP, source suppliers, run the RFP, evaluate and award business and manage PO's, approvals and invoices. While this idea is not new, it seems like it is getting both closer and more visible in terms of how it can practically impact categories and cases in the “real world”.


The key to successfully leveraging AI lies in taming data. Procurement teams today have access to immense amounts of data but that data is nearly useless without a structured approach (and computing power) to help organize, analyze and interpret it.

One of the most powerful trends we see is organizations finally harnessing the power of spend analysis to create category dashboards which inform a buyer of the following:

  1. All current spend data within a category (standard Spend Analytic)
  2. All supplier info (e.g. D&B data brought in)
  3. Reviews of those suppliers from stakeholders but also from other companies using the same supplier (like we reading reviews on Amazon or on hotels.com before buying)
  4. Forecast or pricing trends and in-company needs - which helps the buyer negotiate the best terms and contracts

Want to learn more about Spend Analysis?

This is great information. The real value-add from AI will be finding a way to organize it so that it helps inform decisions. The promise here is still ahead of the reality but we’re watching closely.  

RFx process improvements
We are always on the lookout for new or improved approaches to RFx management. Always being willing to learn is what built our standing as one of the world’s leading experts in this field. One of our customers recently detailed some of their RFx management learnings and tips including aspects which are used too infrequently in the “real world”:

  • For high-value efforts, invite potential suppliers in to face-to-face meetings before even writing your RFP/requirements
  • This will allow you to learn a great deal about the suppliers and their capabilities (i.e. driving innovation from suppliers rather than just asking them to input a price for something you have specified)
  • While engaging your suppliers in such forums, buyers can actively involve their suppliers in the wider holistic process to help drive supplier engagement in driving end-to-end value through a buyer’s supply chain
  • This is an excellent example of the first point: buyers are no longer just processing RFx’s. They are using them as a learning opportunity

Here are our 5 tips to achieving more with your eRFx tool

If you’d like more information about how to improve the results from your eSourcing program, please contact us or reach out to your Scanmarket account manager.

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