To some, 2015 might seem like only yesterday.
But in the case of procurement, the function moves quickly. Today, procurement has taken on a completely different identity from a decade ago. No longer a purely cost-cutting entity, its rise has been driven in part due to an acceleration of advanced digital tools which has been heralded as a ‘game-changer’ for procurement. From organisations going entirely paperless to offering new ways to manage supplier data, the advancement of technology has provided procurement functions with unprecedented time and cost savings that were previously unimaginable.
In this article, CPOstrategy explores five of the ways procurement has evolved over the past 10 years.
Collaboration with suppliers
A major shift over the past decade has been the importance of developing key, strategic relationships with partners. The days of an alliance being solely regarded as transactional or one-way. In order to succeed long-term, business partnerships need to be built on trust and have a similar outlook on important topics such as sustainability. Success is impossible to achieve alone and on the back of recent geopolitical problems, companies recognise the role good partnerships can play. A good supplier experience can lead to stronger supplier relationships, increased collaboration and increased supply chain performance.
Digital transformation
One of the biggest shifts over the past 10 years has been the acceleration and maturity of advanced digital tools. With the likes of AI, Big Data, cloud and blockchain all shaking up procurement, CPOs now have a massive opportunity on their hands. The range of tools at a procurement executive’s disposal is staggering and allows for much greater efficiency and cost savings. The latest buzzword to reach the procurement industry is the potential of generative AI and the exponential value it brings. Procurement processes are increasingly becoming more digitalised with the number of procurement software vendors booming in recent years.
The CPO role
A Chief Procurement Officer has never had to wear so many hats. Gone are the days when procurement professionals were siloed and kept out of the way of the action. Today, they are front and centre of an organisation and help make key decisions. This even extends to where a CPO is located during work hours. Even five years ago, before the COVID-19 pandemic, working from home was rare. However, since then, there has been a major shift in workplace attitudes, and hybrid models have become increasingly popular.
Sustainability drive
No longer simply a ‘nice to have’, there has been a significant emphasis on the importance of sustainability and implementing ESG principles in recent years. While legislation is one reason for this, another is changing customer demands as the world has woken up to the fact that more needs to be done to save the planet. There is also the visibility of extreme climate change such as wildfires notably recently in Los Angeles which caused 170,000 people to evacuate from their homes as thousands of buildings were destroyed. Climate action sits among 17 Sustainable Development Goals to achieve significant reductions in CO2 emissions by 2030.
Greater resilience
The past decade has seen unprecedented ‘black swan’ events unlike ever before. From the pandemic to wars, there has been a number of external disruptions to the global supply chain. It has meant that supply chains and those within them must be agile and keep their finger on the pulse of the latest risks. The pandemic demonstrated the importance of having a backup plan and those with robust supplier relationships are less likely to be impacted. In the tumultuous and ever-changing world of today, procurement professionals must be vigilant and ready to respond.