Technologies, risks, opportunities and skills… many topics have been the focus of interest in discussions surrounding the transformation of procurement. What could be better than a snapshot of key indicators from the latest major studies for an insight into the current situation?
Which technologies are popular with procurement departments?
A whole range of technologies are available to procurement departments and company maturity varies depending on the type of technology used.
According to Deloitte*, the most widely used technologies in procurement departments are:
- Collaborative networks and BtoB markets
- Predictive/advanced analytics
Meanwhile, the use of the following technologies is not so widespread:
- Virtual/augmented reality
However, purchasing departments are looking carefully into alternative solutions such as automation, extraction of intelligent content and Artificial Intelligence/cognitive computing.
What are the opportunities and obstacles for procurement?
According to Ayming*, the development of these technologies will allow executives to take advantage of three major opportunities:
- Increased integration with the supply chain
- The possibility of exploiting Big Data
- A more efficient workforce
However, this progress may be hindered by three obstacles:
- Technology that is not compatible with existing processes
- Lack of resources to implement the solution
- Poor change management within the business
What skills are needed?
In order to adapt to this digital transformation, future buyers will need to possess specific skills, ranging from knowledge to soft skills.
According to Deloitte*, Procurement Officers are already investing in training for their teams in three key areas:
- Procurement techniques (negotiations etc.)
- People skills (conflict management, collaboration etc.)
- Digital skills (data synthesis skills for Big Data, predictive analytics etc.)
What are the risks for procurement departments?
The digital transformation of procurement must allow teams to better anticipate and manage potential crises. According to The Hackett Group*, the following major risks lie ahead:
- Cyber security/data security
- Access to critical talent
- Intensified competition
- Breakthrough innovation
- Regulatory risks
- Intellectual property theft
How to create more value for the company
In addition to managing crises, this transformation will enable procurement departments to be more efficient and create more value for the company.
According to Ayming*, Procurement Officers will focus on certain areas of improvement in order to achieve this:
- Tools and systems
- Early involvement
- Increased budget
- Accountability and delegation
Business leaders are becoming increasingly aware of how procurement may do more than reduce costs, and can instead add real value to organisations and address future challenges. Nevertheless, it is important to adopt the correct strategy, particularly by investing in relevant technologies and acquiring the necessary skills.
*Consultancy firms specialising in procurement