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Procurement’s next frontier: The future will give rise to an organization of one

Preparing for tomorrow’s digitally driven, strategically focused procurement organization

OVERVIEW

Today’s procurement organization faces a major question: How can it build on its tremendous success in generating efficiencies and cost savings, and evolve to meet the business’s changing demands?

Accenture research provides an intriguing look at the potential answer. We explore:

  • How digital technologies will revolutionize the procurement organization and its professionals by 2020

  • The resulting effects on how procurement interacts with internal business stakeholders and the external supply base

Our research also suggests that this new digitally powered procurement organization will continue to significantly drive down its operating costs, while delivering more strategic value to the larger enterprise.

Key Findings

Our research reveals a very different landscape for procurement in the next five to seven years:

  • Companies will rely heavily on a small group of strategic suppliers to help reduce costs and risk, as well as boost the top line through more effective innovation.

  • A new, strategically focused procurement organization will help procurement deliver value to the business—far beyond securing needed supply at the best possible cost.

  • As late movers embrace cloud solutions, usability and content will replace low costs, standardization and faster access to new technology as the source of cloud-based competitive advantage.

  • Mobile networks and the Industrial Internet of Things (IIoT) will radically change or even eliminate certain procurement processes.

  • Procurement organizations will pervasively use advanced analytics to help transform five key procurement areas.

  • Intelligent and self-learning computers will become trusted “expert advisors” to procurement professionals, augmenting complex decisions and, in some cases, operating autonomously under human supervision.

Recommendations

To accelerate procurement transformation, companies should:

  • Use technology and culture to make transparency the foundation of strategic supplier relationships.

  • Embed procurement professionals within the business, connected to a smaller core decision-making team.

  • Choose cloud solutions that offer superior usability, and use the content in the cloud to facilitate core procurement activities.

  • Leverage the Industrial Internet of Things (IIoT) to question everything the procurement organization does.

  • Pair analytics technology tools with procurement, analytics and technology experts to make more effective, data-driven business decisions.

  • Apply cognitive computing first to routine, manual work and then to more complex activities requiring judgment and decision making.