Early adopter in sourcing innovation, the Procurement function is transforming, monitoring and actively participating in the emergence of new uses, launch of new products and promise of a new customer experience.
Developing this new state of mind and fostering cultural change within a Procurement Department requires rethinking its organization, seeking agility and a strong commitment to digitizing Procurement processes.
In its quest for innovation, the Procurement function went from being a cost-control guard to become a start-up incubator at the service of the company’s performance.
The Big Bang of Innovation
To face this challenge, the Chief Procurement Officer needs to be a strategist in order to anticipate technological changes, understand business issues and align with internal clients’ needs.
At the center of a complex and rapidly expanding ecosystem, the Procurement Manager must strive for internal efficiencies to free up resources to focus on capturing innovation.
The promise of artificial intelligence makes sense in this perspective of moving from a relatively administrative function to a connected function focused on markets evolution.
Leading the Procurement strategy to focus on new challenges like the sourcing of innovative suppliers and the development of an ecosystem of startups put on new perspective the attractiveness of suppliers and the importance of investments to be allocated to understand the suppliers.
The Procurement departments are all faced with the need to revise well-established practices and adapt their negotiation strategy to help the emergence of innovative suppliers, mostly ignored and with deep need for financial support.
360 ° supplier knowledge
In order to anticipate, you must understand, analyze and know. Supplier knowledge is the counterpart of customer knowledge. Controlling risks, monitoring the research and development of strategic suppliers, analyzing the weak signals that make it possible to detect the disruptive effect of new entrants, knowledge and foresight become strategic in order to adapt to the evolution of the markets and being used to the digitalization.
Procurement Director must have a 360° vision to enhance agility and inform decision-making. In this context, the digitalization of Procurement must activate qualitative levers and consolidate an exogenous amount of knowledge made available by the main content providers. Big data for Procurement is also a source of immeasurable knowledge.
Technology at the service of agility
To provoke such a cultural change, the Procurement function must make a firm commitment to decompartmentalize processes and align the Information System with new uses.
360° suppliers, SRM, eSourcing, eProcurement, Contract repository, eCatalogs, marketplaces, dematerialization, collaborative space, eSignature, … Levers to be activated are multiple and on demand.
Technology is a way to build a special relationship with strategic suppliers and track the mobility needs and user experience of the prescribers.
By adopting an informed and proactive approach, the Procurement Department can consolidate its pioneering role in the operation of the networked enterprise and the emergence of the knowledge economy.
From a software provider perspective, the race for innovation is on for several years, it is accelerating and became a top priority. Driven by the Procurement Managers, the investments are massive in the field of user experience, network providers, voice recognition, chatbots and new use cases for Artificial Intelligence.
The Procurement function enters the supplier’s knowledge and the sourcing of innovation. Annuity payments are a thing of the past. The agility, the adaptability of Procurement, the decompartmentalization constitute a paradigm shift to invent an open Procurement function, consistently monitoring and well connected on trends and markets.
Erwan Clorennec, CEO of Axbility Consulting