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    Blog

    Procurement Technology – A look to the Future

    Innovation | Sourcing Optimizer

    Procurement is changing, of that there is no doubt. It’s an obvious statement of course. The real discussion is now, “how much?” and “what’s coming next?” With new technologies emerging onto the scene globally, and the uncertainties created by the pandemic, mixed with massive social, economic and demographic shifts these questions are becoming increasingly top of mind. To bring this back under the lens of procurement there are two main schools of thought on the subject – R.I.P procurement and the primacy of procurement.

    The former certainly is a daunting prospect. It entails visions of technology taking over and stealing jobs, killing off procurement as a profession and as a business function.  Instead, we are looking at the primacy of procurement. Plainly speaking this means that procurement is in the driver’s seat both in innovation but also becoming a focal point of business strategy.

    During a webinar we conducted a poll with over 1500 procurement professionals and asked what they thought would be the most impactful on procurement’s future. This is a good indication of procurements mindset but not meant to be fully representative.*

    Procurement’s Evolution

    The primacy of procurement is all about the industry evolving its role to become a strategic leader and embracing these new technologies to eliminate the tactical nature of the past. Instead of being a paperwork focused and monotonous profession, procurement needs to evolve and change with these new times. The future will have a strong focus on analytics and using data to drive decisions. Strategic thinking will be a key, with tactical routine cut out procurement professionals will have time to focus on strategic, value-adding initiates but that mindset and skills need to be sharpened now.

    A strong digital literacy will be needed, not to say that everyone needs to be an expert or suddenly be expected to know how to write code, but an understanding of procurement technology, source-to-pay platforms, analytics dashboards, and how it all works together to provide visibility and insights is important.

    Which Procurement Technologies will have the Biggest Impact?

    Included in the poll are some of the hottest current and emerging technologies in the procurement space, but by no means an exhaustive list. The results are somewhat mixed, but not necessarily surprising. The top two technologies, AI-based E-Sourcing and Automated Contract Review and Analytics are based around machine learning and artificial intelligence, which is at the heart of all technology innovations. Investing in an application that is using this, like JAGGAER’s Advanced Sourcing Optimizer (ASO), will put you on the forefront of procurement innovation while bringing efficiency and ROI to your sourcing operations.

    Procurement Technology of the Future Poll

    The two with the least expectations from this poll are RPA and Conversational Platforms or Smart Assistants. RPA or Robot Process Automation is a powerful technology, and no doubt will continue to play a role in the future of procurement but according to Gartner’s Hype Cycle, the expectations around it are beginning to subside as it grows into a mature technology.

    Conversely, conversational platforms are still on the rise according to Gartner, and therefore a bit surprising that it does not have a higher rank in this poll. All of these technologies have powerful application potential in procurement especially when combined to form what we call autonomous procurement. By applying the learning capabilities of AI to the automation technology that RPA brings, and then taking it a step further with a conversational platform, you get an incredibly powerful system that not only automates routine tasks but evolves overtime and can complete complex tasks and calculations in seconds. The technologies are emerging, and while true autonomous procurement is still around ten years out, procurement teams need to start investing in these emerging technologies and shifting to a more strategic role.

    Looking to Procurement’s Future

    What this poll tells me though is that it boils down to what are problems that I need to solve in my organization today?  And how do I take those technologies and make them work to solve a specific outcome? Procurement as a whole has been able to do this slowly, bit by bit, but today it’s clear that we must be able to incorporate this technology into our day-to-day at scale.

    To bring it full circle remember that we are pursuing the primacy of procurement, not R.I.P procurement. These advanced technologies are not meant to replace people, but to augment them. Procurement going on autopilot for lack of a better word isn’t the desirable outcome for anyone, nor do I think is it the most effective. Technology certainly has its place in business. To run complex calculations or cut out routine everyday tasks it’s perfect for. But there will always be a firm place for those who can think strategically, are comfortable working within the platforms themselves, and those who bring an analytical mindset to the table. Procurement is changing, and it’s up to us to change with it.

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