Procurement is changing. The rising tide of digitalisation means that the core activities associated with procurement functions — sourcing, negotiations, and category management — are becoming increasingly automated and optimised. However, as procurement teams are expected to do more with less for the business as a whole, they find themselves facing a choice: continue to strive for efficiencies in delivering their core activities, and risk being automated away or outsourced to a growing market segment of third-party procurement-as-a-service companies; or do something different — rip up the script and take a bold new approach to how procurement can create value for the business.
Procurement already underwent a sea change around the turn of the millennium. The days of paper purchase orders, excel spreadsheets, and handshake deals over long lunches came to an end. Procurement went from a reactive, tactical backroom function to a strategic centre of category and supplier management.
In the next few years, procurement leaders will need to execute another transformation of comparable magnitude, taking their functions beyond sourcing, negotiations, and category management to make procurement an embodiment and an enabler of the broader organisation’s strategic ambitions relating to everything from contributing to core business objectives and delivering shareholder value to sustainability.
At least, that’s the future that Roche’s Chief Procurement Officer, Marielle Beyer, and Head of Strategy & Solutions, Patrick Foelck believe is coming. And it’s the one they are working towards today.
“If you focus your procurement organisation solely on the core … what’s to stop that core from just being automated away?” — Patrick Foelck, Head of Strategy & Solutions Procurement, Roche
“Procurement used to be quite a limited function,” says Foelck, explaining that, narrowly focused, with fewer responsibilities, procurement’s potential for value creation and impact within the larger business was limited to cost savings. Since then, procurement has undergone multiple transformations, transitioning from simply administering the ordering process to category and supplier management. Now, Foelck argues, procurement needs to reinvent itself once again, as the unfolding AI revolution and a rapidly-evolving economic environment redefine budget and resource management. Given the advances in digitalisation, automation, and solutions-as-a-service, external service providers or technology can soon, Foelck argues, probably do a better job of connecting demand to supply for less money.
In short, procurement in 2025 is facing an existential threat.
Foelck asks: “If you focus your procurement organisation solely on the core without looking beyond the function for opportunities to create strategic value, that’s fine, but what’s to stop that core from just being automated away?” He and Beyer believe that there is “so much more” that procurement can (and must) do.
Of course, making procurement an enabler of strategic wins for stakeholders across a growing portfolio of business needs and expectations can’t happen at the expense of flawlessly executing procurement’s core functions. Procurement needs to do both.
Creating the space for procurement to creatively execute its core functions while also exploring new opportunities to drive value for the business was, therefore, the first step in Beyer and Foelck’s plan to transform procurement at Roche.