Over the next decade, procurement
officers will need to take on more expansive roles within their organization.
They will need to become guardians of the corporate brand, advocates for
sustainable business practices and innovators who help develop new products and
services. Companies that embrace this broader perspective for their procurement
teams will find themselves in a better position to tackle the 10 change
dimensions—from managing and
anticipating risks to embracing the need for greater
transparency across the supply chain—that will transform procurement by 2025.
Many of these challenges, described in
detail below, have the potential to disrupt the dynamics of current supply
chains. Procurement officers who proactively address these issues will be
taking a major step toward helping their organization prepare for the future.
Risk: By 2025, procurement risk management
will undergo a major shift, moving away from emphasizing compliance to adopting
a more holistic strategy that includes total risk exposure, risk mitigation
investments and risk transfer pricing. To enable this transition, procurement
leaders need to develop category managers who can develop next generation
approaches to supplier risk management and factor new metrics into major
sourcing and supplier management decisions.
Globalization: As emerging markets assume a greater
role in the global economy, the traditional demand and supply poles that have
shaped global commerce over the last 50 years will change dramatically. By
2025, global companies will have procurement managers based in China to source
materials and services not only for their operations in that country, but for
the entire organization. In the Americas, Brazil will become a major source of
both demand and supply for global companies. To handle this task capably,
procurement teams need to start developing expertise in local emerging market
sourcing in China, Brazil, Russia and India, as well as other developing
economies.
Finance: In the future, procurement managers will
need to broaden their skill sets to help their organizations adapt to the
complex challenges of managing the global supply base. Many will need to
develop financial acumen that rivals those of their finance counterparts.
Leading companies should start taking steps to tighten the relationship between
finance and procurement and to enhance the financial skills of their
procurement teams.
Innovation: By 2025, the leading procurement
organizations will serve as a primary channel for finding new ways to create
value from the global supply base, whether by streamlining new product
development or outsourcing non-core functions. As a way to move this evolution
forward, procurement organizations need to gain a better understanding of the role
outside entities play in driving innovation in their industries. To support
this, many procurement teams will need to expand their expertise in
engineering, design and new product development.
Transparency: Social media and the increasing acceptance
of information transparency will amplify the degree of scrutiny on procurement
organizations. This disruptive change, coupled with the adoption of real-time
social technologies, will make procurement one of the most visible corporate
functions to the outside world. To that end, procurement leaders need to
encourage their teams to adopt a social mindset and operating model that will
sustain the corporate brand in this more transparent era. By 2025, the best
procurement officers will be as comfortable speaking to consumers, regulators
and the press as they are with suppliers.