As we enter a new year, its a great time to reflect on past progress and try to predict what the future might hold.
In 2017 we saw:
- UK manufacturing growth hit a 4 year high
- Companies start to get serious about the impact of GDPR
- A rise in pay for procurement professionals of 5.3% average for the third year in a row
- Continued vendor consolidation in the e-procurement market including Coupa's acquisition of TradeExtension, the Jaegar/BravoSolution merger and the IBM/SAP alliance which will see the sunsetting of Emptoris
So, now to my predictions for 2018....
1. A focus on compliance
An early goal for all procurement organisations has to be GDPR compliance which comes into effect in May 2018. Other legislation we procurement people need to keep at the forefront of our minds include the Modern Slavery Laws, the Restriction of Hazardous Substances, various laws around Traceability....and more.
All of which points to having pin-point detailed knowledge of the supply chain, together with check points and audit trails to prove compliance.
2. Re-engineering the supply chain
With Brexit dominating many procurement consultants' minds, re-engineering the supply chain has to come top of the list. 40% of UK businesses have already embarked on changing their supply chain away from EU suppliers, according to a recent CIPS survey.
3. Expanding the horizon of TCO modelling
Cost reduction never goes away! And Total Cost of Ownership (TCO) modelling has been a focus for many, many years.
But as more procurement teams use disruptive procurement techniques to challenge the norm, their TCO models will expand. They will consider not just the cost of owning items of capital equipment and stock, but also weigh that against the cost of acquiring the function being performed by that item as a service instead.
In some cases, replacing business processes, or parts of them, with services carried out by third parties in order to make a bigger impact on business costs, risks, quality and shareholder value.
4. Digitising the supply chain
Following on from the above two points, alongside introducing new suppliers and outsourcing processes to others comes the need to make the supply chain more responsive than ever.
In many cases, competitive pressures on delivery times will force businesses to look only at suppliers who can work with with their chosen supply chain planning and communications tools.
For others it will be traceability, quality and audit concerns that drive the need to have a complete, digitised view of their supply chain.
5. Disruptive procurement will become the norm
Today, Insider Procurement is leading the charge on disruptive procurement approaches. We've defined the 7 key ingredients of the approach and we've documented numerous examples of disruptive procurement in practice.
We predict that others will follow suit, realising that traditional procurement techniques are reaching the maximum savings that are available and looking to find new ways of impacting the bottom line.
6. Procurement professionals will play a key role in business innovation
Far a by-product of innovation, sourcing the things that the innovators demand, procurement will be involved at the inception. They will be driving their colleagues and suppliers to find new, faster, cheaper ways of doing things.
As a result, procurement will play a key role not only in cost control, but in driving real shareholder value.
7. Widespread use of eProcurement
As eProcurement systems reach maturity, they have become tools that are accessible to those outside the procurement team. These new, easy to use software platforms provide an increasingly mobile workforce with the tools they need to make purchases without the administrative overload of days gone by.
Implemented correctly, eProcurement systems should give procurement more time to adopt a strategic, innovative position in their organisation.
In short, procurement will play an even more strategic, forward-thinking role in 2018.
To quickly identify your future procurement priorities, we'd like to invite you to take advantage of our FREE strategic procurement audit. It's a three stage process that culminates with a report and presentation of our findings. Find out more and reserve your consultation here.