Procurement is in an era of change and disruption. Advancements in technology are changing the ways procurement teams operate and how they function within the larger organization.
Our latest eBook The State of Procurement 2020: Present and Future explores the current state of procurement, the benefits and pitfalls of automation, and how the procurement leaders of today are navigating a wave of change.
“Fifteen, maybe twenty years ago was the first wave,” says Greg Tennyson, Head of Global Corporate Services at VSP Global, the largest vision insurance company in the U.S. “And it started with enabling the business to create a digital requisition—as opposed to one on a piece of paper. Five to 10 years ago [the biggest development] was in spend analytics. More recently, it's been the robotic process automation (RPA), artificial intelligence, machine learning, where the system is doing a lot of the heavy lifting and providing actionable insights to the talent.”
Leveraging these new technologies such as automation, RPA, AI, and ML to advance procurement enables procurement teams to play a more impactful role within the wider organization, increasing their viability and visibility. But what does it mean for the future of procurement teams? How will the advancement of automation impact headcount? Will bots take your job?
“There may be some gradual reduction [in headcount], but the talent within procurement will be more strategic,” says Tennyson. “They'll be playing more of an advisory role. The change will require better soft skills, better selling skills, better negotiation skills. They won't be mired in the transactions as most of them are today.”
Automation reduces the need for buyers to carry out more mundane, administrative tasks. The emailing, calling and communicating back and forth between buyers and suppliers, which has historically been where they’ve focused all of their time, will be obsolete with procurement solutions. So, what does this mean for leaders looking to build a procurement team? This shift also signifies a change in recruiting. A different skill set is required to be successful in the new era of procurement.
“We’ve been able to do more work with the same or fewer people. My goal is not to reduce headcount,” says Frank Cuomo, Vice President of Sourcing & Procurement at Univision. “That creates a false illusion of reducing costs. Reducing headcount gives you a one-time cost savings opportunity. That's it, but if you keep that headcount and you have [the team] perform value-added activity, you can drive additional savings while leveraging automation to do the repetitive, non-value transactional activity. I want to extend the team and turn them all from tactical, transaction-performing employees to value-driven employees.”
In our eBook, The State of Procurement: Present and Future, Greg Tennyson, Frank Cuomo and other the procurement leaders discuss how they are navigating all of this change. We discuss the current state of procurement, the benefits and pitfalls of automation, digitization and its impact on headcount, how to budget for these new technologies, the new skill set required for procurement teams and what the future of procurement tech looks like.
Change is inevitable. Use these new technologies to your advantage to propel your procurement teams and overall organizations forward, or risk getting left behind.
Download The State of Procurement: Present and Future eBook here.