Future trends of procurement every customer-centric industry should know
by Shruti Agrawal, Director, Excella Worldwide
As organisations focus on finding ways to procure the best products within their budget, supply chain comes to the forefront as a strategic resource that drives business value.
But adapting to every emerging trend for achieving the best results can become cataclysmic if you fail to get your fundamentals right. The procurement technology is expected to undergo a paradigm shift with the rising demand for real-time collaboration.
A recent global procurement report revealed the role of technology in reshaping every element of procurement for improved operational efficiency and timely contract management. Companies that will adopt a progressive approach will be in a better position to handle these ten major trends that will change the scope and structure of global sourcing:
- Procurement will play a decisive role in all operational decisions
- Customer relationship management will take the centre stage
- Skill development programs will become mandatory for procurement teams
- All procurement transactions will take place through web applications
- Big data analytics will drive major changes in procurement
- Global sourcing will become a perennial activity
- Complexity management will come to the fore
- Risk management will become an inherent aspect of procurement arrangements
- Product scarcity will be an ongoing issue
- Procurement will form a significant part of corporate strategy
A Seven-Step Strategy to Meet the Future Needs of Procurement
As predicted by experienced sourcing agents, the future of the procurement industry is promising both as a profession and as a business process. Here are seven critical areas that need special attention from businesses that seek to succeed:
1) Realign Business Strategy to Accommodate Supplier Relationships
There is a major off-balance of network when it comes to sourcing. The need of the hour is to embed the procurement process into existing business operations to facilitate free exchange of information and smooth supply chain management.
2) Adopt a Nimble Approach to Strategic Decision Making
The past complexities of supply chain management resulted in rigid contracts and raised the cost of switching vendors. This concept needs to be replaced with a flexible yet dependable sourcing model that focuses on reducing supplier proximity for enhanced visibility. This less extended approach will condense the product lifecycle and bring the vendors closer to the companies.
3) Employ Advanced Project Management Tools
When talent management combines with automation, companies will find themselves working more efficiently. Sourcing agents will be required to master technical skills and relationship management to lead a world-class sourcing operation.
4) Be Prompt With the Response
The procurement market is highly volatile and requires prompt management of market demands. Businesses need to develop resilience to unpredictable changes by being agile with their procurement process. Near-shoring will be the key to staying consistent with procurement plans.
5) Stay Prepared for Supply Risks
Even as global sourcing continues to thrive, companies need to consider the imminent dangers of natural disasters and geopolitical impact in near future. The pros of low-cost country sourcing are not risk-free and no company can afford to overlook the security aspects.
6) Hire Sourcing Agents to Gain Competency
Companies have realised the benefits of segmenting the supplier base and focusing solely on managing relationships. For everything else there are China sourcing agents who actively manage everything from negotiations and quality control to documentation and delivery.
7) Collaboration is the New Key to Effective SRM
Sourcing agents play a pivotal role in the procurement process from start to finish. Right from revamping systems and integrating processes to charting innovation and facilitating coordination, the complete transition from buyer to supplier is managed by sourcing agents.
If you want to sustain and thrive, you need to invest your resources on business intelligence that enables you to understand and analyse process benchmarks and procurement possibilities for informed decision making.
How Technology Will Transform Procurement Operations
The use of technology and automation has accelerated supply chain management reducing human intervention to minimal. As companies continue to capitalise on automation, priorities will shift from operation to strategic integration of supply chain for a seamless customer experience. Here are four key trends that are expected to bring a transformative shift in the procurement space:
User Experience Will Become the Core Focus
Procurement applications will undergo a sea change as priorities shift from functionalities to end-user experience. The digital era demands innovation in product design to ensure complete client satisfaction. Fuelled by the power of technology, procurement is all set to embrace big data analytics for better planning and prudent decision making. As the need to ensure an easy navigation emerges, companies will switch to cloud technology and responsive websites that offer a seamless experience to consumers on every device.
Business Intelligence Will Emerge As the New Focal Point
With the development of intuitive procurement software, managing routine tasks will become a total breeze. Software solutions will facilitate data-driven decision making and voice-enabled communication in the coming years. These intelligently designed solutions will work with minimal human intervention and accomplish every task efficiently. From preparing insightful reports to managing inventory to analysing data, these platforms will turn the mundane manual procurement process into an error-free and fast activity.
Digital Technology Will Take Over Supply Chain
Technology will emerge as the undisputed tool that leads collaboration between business processes providing real-time updates into supplier risk management. As companies switch to automation, accounts payable will turn into profits. With real-time visibility across orders and contracts, suppliers will be in a better position to mitigate risks and maximise profits.
Automation Will Become the Catalyst for Change
The entire procurement process right from purchase and contract engagement to payment and delivery will be automated. With the entry of next-gen procurement apps, the entire supply chain will be digitalised to offer real-time insights into supplier management.
The new-age procurement technology will reinvent the existing supply chain model to a more collaborative approach that will ensure significant cost savings and improved efficiency.