As we approach 2018, technological innovation in all industries is inevitable and when organizations fail to embrace new technologies and models they run the risk of falling behind the competition. By jeopardizing their competitiveness they ultimately run the risk of falling out of the race altogether. Procurement is no different, but as an industry it continues to fall behind in innovation. In order for the procurement function to successfully move forward, there are three necessary ingredients to drive innovation in the field.
Digital transformation. The irony of the procurement function is that for the past 10 years or so it has supported the rest of the corporate organization’s digital transformation but has yet to fully transform in its own right. According to the Hackett Group, “84% of procurement organizations believe that digital transformation will fundamentally change the way their services are delivered over the next three to five years. [But] only 32% have developed a strategy for getting there.” Using tools that are available to accelerate digital transformation, procurement will become more collaborative, effective and profitable.
Big Data. The ability to analyze data complements existing business intelligence applications and delivers greater value to obtain deeper insights from the multitude of data that procurement has available to them. Through these insights departments can better understand their needs, improve efficiency and get a leg up on the competition.
Champions. Champions are proponents of new models and systems, they are willing to push the limits and test new offerings and solutions. Leaders who look beyond bottom line results and minimizing risk, and support specific initiatives that drive business transformation are able to push organizations forward.
It is clear that procurement as a whole still has a ways to go before they utilize technology to its full extent to accelerate innovation. But by streamlining and automating archaic processes, using available data and having forward thinking leaders, procurement can transform from an isolated, siloed unit to a trusted and influential business function.