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    The Impact of Integration Technology

    Innovation

    Procurement professionals are facing an extremely complex and dynamic landscape, often with an outdated toolkit. While the goals are still similar to what they were, the pace has accelerated and information has grown. We’re expected to drive value through increasingly scarce cost savings opportunities. These are often hidden in an ocean of disconnected and scattered information and, without a full picture of your organization’s supplier contracts, as well as a deep understanding of your spend data, meeting these goals seems impossible.

    Currently, technology is transforming business strategy. In a world that is continuously being reshaped by digitization; conventional or traditional thinking doesn’t guarantee success anymore. Cutting-edge technologies are compelling a shift in how enterprises conduct business. This is ushering in a new era of forward-looking, technology-driven strategy. In order to navigate an increasingly volatile business environment, it is more important than ever that procurement professionals adopt a technology-first mindset.

    Previously, procurement professionals would focus on the tactical processes of short-term purchasing or planning. However, this approach is no longer the most useful approach due to the ways technology has changed the game.

    It’s all about the data

    Data is the key asset to advanced technologies in procurement. The impact of finding applications for data throughout source-to-pay operations is pivotal. Data is empowering predictive analytics, as well as enabling enterprises to anticipate supplier activity, identify purchasing patterns, and forecast marketing trends. The next step for procurement teams is toembed robotic process automationinto their operating frameworks. This will drive significant cost savings and enhance both productivity and efficiency.

    Embracing a data-driven, technology-centered strategy, procurement professionals can take a forward-thinking and proactive approach – generating deeper insights to dramatically improve decision-making, in addition to boosting competitive advantage.

    A Maturing Department

    In our recent report, we found that procurement reports into Finance, Operations, and Supply Chain in the large majority of instances. Only 6% report into the C-suite, compared to the 17% of respondents who stated that this was their reporting line in 2019. In addition, slightly fewer respondents reported that Supply Chain owned the reporting relationship – 28% versus last year’s 33% . Procurement leadership would also like to either own their reporting or hold a relationship where they report into the C-suite.

    Looking forward, 41% of respondents would like to have procurement maintain their own reporting relationship through the greater supply chain function. Another 39% of respondents would like to retain a relationship with either their finance or operations groups. This finding is akin to last year’s, where 40% of respondents felt that they would also prefer to have a reporting relationship contained within the supply chain function. This suggests a growing degree of recognition and independence being afforded to procurement, as instead of seeking C-Suite influence, they are confident enough to report directly into their own function as opposed to Finance, Operations, or other C-suite leaders.The CPO can take their place as a core member of the executive leadership for the organization at large.

    Artificial intelligence is the future

    Technology trends are going to continue to move towards AI in the near future. Procurement professionals will need to be able to take and understand insights coming out of AI-driven programs and act on them to maximize their strategies in order to thrive in an environment that is currently evolving. Learning to make the most of AI-driven insights is a bit like learning how to multiply. In school, you had to have an understanding of how multiplication works by doing it by hand. Once you understood how it works, you started doing it with a calculator. The learning curve is similar for AI insights – you need to understand where the insights came from and how the AI ​​came to the decision that it came to.

    In the end, the procurement professional of the future is going to be more adept at using insights for their daily work. They will also be more of a consultant, working with the business around very specific needs and ultimately trying to source those needs in an intelligent manner, versus being an order taker.

    If you’re interested in learning about where procurement is headed, check out our white paper on the topic, and learn how to prepare for autonomous procurement. Download Now

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