There’s good reason to be optimistic about the future of procurement in the coming year and beyond. Despite facing some downright intimidating challenges, it’s an exciting time to be in this field. Indeed, experts at the recent Art of Procurement Mastermind Live event offered a fresh look at budding procurement trends, the renaissance of procuretech and the increasingly prominent role of procurement.
Personally, I left the sessions intrigued, motivated and proud to be a part of what feels like the start of a new era in the field, led by energetic, ambitious change makers.
In this post, we’ll explore five emerging procurement trends. Specifically, we’ll focus on the future and strategies for procurement professionals to prepare for the post-pandemic ‘next normal.
- Shifting mindsets, from the top down
- New procurement KPIs that align with big-picture goals
- An overhaul of procurement’s reputation
- Welcoming newcomers with non-traditional talents
- An emphasis on the three Cs
1. Shifting mindsets, from the top down
Generally speaking, the utilization of procurement (or lack thereof) within an organization reflects its perceived value to the c-suite. Thanks to an increasing awareness of the importance of procurement, CPOs have an opportunity to do more.
To maintain momentum, procurement leadership needs to communicate their value beyond simple cost savings. In addition, procurement can begin to influence how the c-suite views their business relationships.
2. New procurement KPIs that align with big-picture goals
Procurement often operates in a tightly-contained business unit. Accordingly, many of their KPIs are set internally. However, as procurement becomes a strategic force in the business, the goals of the department must align more directly with overarching business objectives.
Unfortunately, it’s a challenge to create seamless alignment. As Payne explains that it’s important to recognize ‘what’s important to the business versus what’s important to procurement. On the procurement side, the biggest goal is always savings, which is generally a mis-match of priorities with the overall business, which is the wrong model and creates misaligned expectations. Fundamentally, this is the biggest gap between the two.”
Procurement leaders need to identify opportunities to contribute to growth outside of their own vertical. For example, consider engaging with other department heads to align with their goals, particularly when it comes to digital transformation.
3. An overhaul of procurement’s reputation
The perception of procurement within a business may range from the keeper of the purse strings to a roadblock. Unsurprisingly, this view needs to be overhauled with executives and stakeholders alike.
It’s procurement’s responsibility to build positive internal relationships, earn a seat at the table and influence future decision making. Consider how you can turn stakeholders into procurement advocates. For example, proactively share supplier and spend data that will help them meet or exceed their growth goals. As Phil Ideson put it, “Early involvement with procurement in the decision making process with buying is kind of like the holy grail.”
4. Welcoming newcomers with non-traditional talents
As procurement evolves, so too does the professional profile. Consequently, many procurement teams are prioritizing non-traditional soft skills alongside hard skills.
Ruhle, Patel, Addicoat and Tigges offered their top profiles:
- Fast learners
- Clear communicators
- Strategic thinkers
- Digital natives
- People persons
Along with their favorite skills, expertise and traits:
- Broad business knowledge
- Sales-specific knowledge
5. An emphasis on the three Cs
Compliance. Conviction. Courage.
Expect to see these three themes return as procurement trends in 2022 emerge. It’s important to recognize the difference between compliance and conviction in procurement — and find a balance between the two.
Lead procurement efforts with conviction, not compliance alone. Demanding that stakeholders blindly follow rules doesn’t foster a collaborative, productive relationship.
Procurement professionals understand that sourcing and RFP processes exist to protect the business. Consequently, it’s important to convey how processes ensure the growth and success of the organization. Indeed, sometimes it’s necessary to go the extra mile to draw others in, but the investment will pay dividends.”
Finally, take courage. The speed of change in procurement can result in whiplash. Truly, change has been a constant over the last two years. But, this means there is an opportunity now to gather momentum and shape the future.
So, what does the future hold?
While these 2022 procurement trends are merely my predictions, they are based on the insights and observations of many. Additionally, it’s worth mentioning that technology continues to be an overarching theme in nearly every discussion of the future of procurement.
As the technology landscape expands, procurement teams are building their own stacks of solutions. From RFP management software to vendor experience platforms, organizations are increasingly selecting best-of-breed tools to serve their unique needs. However, it’s important to remember that buying technology isn’t the solution in and of itself.
Finally, when facing challenges in the coming year and beyond, remember to stay agile, leverage available resources and lean on a network of peers. As Addicoat puts it, “In adversity comes opportunity. Think dynamically and look for where there’s opportunity.”