The process of acquiring goods and services for an organization, has undergone significant transformation in recent years due to advancements in technology, changes in consumer behavior, and the need for businesses to remain competitive. As a result, KPMG, a leading provider of audit, tax, and advisory services, has identified several key trends that will shape the future of procurement. Here are some of the trends that KPMG listed.
The Importance of Data and Analytics
One trend that was highlighted is the increasing importance of procurement data and analytics. By leveraging data and analytics, procurement teams can gain a better understanding of their supply chains, identify areas of improvement, and make data-driven decisions. The organisation must have the right systems, processes, and people in place to know how to maximise the value. Only then can intelligent automation provide on-demand insights that will assist with forecasting, demand planning, and should-cost modelling.
Category innovation is needed to unlock untapped value through:
- Automation of tactical activities
- Data and analytics to develop and support strategies, inform decisions, and drive action
- Predictive AI to forecast changes and monitor indicators
- Deep insights which provide supply market knowledge into business strategies
- Driver-based category demand and costs which to link to business activities
- A disruption-seeking approach for step-change performance improvement and supplier engagement.
“Procurement organisations are going to need broader skill sets and individuals who can do more strategic thinking and problem-solving.”Dipan Karumsi, Principal, Procurement and Business Services, KPMG in the US
The Need of Procurement Innovation and Customer-centric
KPMG identifies the need for procurement to become more innovative in its approach. This will likely be a focus in all aspects of procurement including systems, processes, and people. By doing so, procurement teams can help their organizations stay ahead of the competition and better meet the needs of their customers.
Additionally, KPMG also emphasizes the need for procurement to become more customer-centric. This involves understanding the needs and preferences of customers and working closely with suppliers to deliver products and services that meet those needs. By doing so, procurement can play a more strategic role in the organization and help drive revenue growth.
In order to deliver this, procurement may:
- Provide a seamless user-friendly experience that is relevant to the complexity of the work
- Fill a relationship broker role, requiring a high degree of emotional intelligence and empathy both on the customer and supplier side
- Be a key contributor in the business planning process
- Act as a broker to products, skills, and sources of innovation to help solve the business’s problems.
The Impact of Supplier Collaboration
Another key trend in the future of procurement is the need to become more supplier-centric. This means building strong relationships with suppliers, collaborating on innovation, and working together to improve sustainability and social responsibility. By doing so, procurement can create a more resilient and sustainable supply chain while also reducing risk.
This model is one where suppliers will:
- Have access to key information to help build robust solutions
- Integrate into your environment though supplier-managed store fronts and master data portals
- Contribute to business, product, and category innovation
- Receive feedback through sentiment, community feedback and traditional performance metrics
- Self-manage purchasing transactions through payment.
The Future of Procurement in Digital Transformation
Digital transformation is another major trend in the future of procurement. This includes the adoption of digital procurement platforms that streamline the procurement process, improve collaboration between suppliers and buyers, and provide greater visibility into the supply chain. By embracing digital transformation, procurement teams can increase efficiency, reduce costs, and improve overall performance.
Procurement technology disruptors that are shaping the future include:
- Extreme automation across the procurement cycle
- Simple, adaptive, end-to-end automation beyond procurement
- Value-added services, such as managed services and external insights, used to maximise procurement ROI
- AI and machine-learning deployed to be seamless and invisible
- End-to-end compliance controls and automation
The Importance of Procurement Workforce and Agile Operating Models
Lastly, KPMG highlights the importance of building a workforce that is equipped to handle the challenges of the future of procurement. This includes developing new skills, adopting to different and flexible operating models, and embracing a culture of continuous learning and improvement. By doing so, procurement teams can better adapt to the rapidly changing business environment and drive success for their organizations.
In conclusion, the future of procurement is shaped by a combination of trends, including innovation, customer and supplier-centricity, digital transformation, and workforce development. By understanding and embracing these trends, procurement teams can drive strategic value for their organizations and remain competitive in an ever-changing business landscape.
For more information on the future of procurement, you may visit the post by KPMG or contact us to learn more how you can take a step to innovative approach.