Editor’s note: This article first appeared in Spend Matters.
At Infosys Confluence 2016, I spoke on a panel titled “Reimagining the Procurement Value Chain” with procurement leaders Ben Moreno, from Stanford University, and Oscar Leon Chong, from Honeywell. The session was moderated by Gartner Managing Vice President Ruby Jivan. The conference, recently held in San Francisco, doubled in attendees over last year and featured a huge group of diverse partners, including Tradeshift.
During our panel, we took turns reimagining procurement. Ruby set the stage with an overview of the forces and trends transforming not just procurement but entire industries and businesses. “Agility is where innovation happens,” she said, and echoed Gartner’s mantra that companies need to go bimodal to keep up with the quickening pace of information technology while still keeping the lights on. In my view, digitizing all supplier-facing activity through an open network is a fundamental requisite for agility. A step further on the maturity curve would be to respond to changes in business or add additional capabilities quickly via apps.
During the session, Ruby brought up compelling stats showing how technology spend is moving away from IT and spreading throughout organizations to enable digital business. In response to this trend, I drove the point that the chief procurement officer really needs to be the chief agility officer and that automation should be married with humans. Algorithms can increasingly handle the transactional elements across procurement while people can make better use of their skills, talents, and experiences for the considered and strategic aspects. Everyone on the panel agreed.
I envision humans and software working together, so that a digital agent, for instance, can handle policy and contract adherence in the background while humans can spend more time on face-to-face processes. We should not be afraid to automate our work because it frees us to do the stuff that the business really needs, such as strong negotiation and collaboration with suppliers.
Procurement leadership needs to push people to be more business-oriented and groom them to be more like business managers. Procurement can take on aspects of a financial advisory role and elevate to a strategic leader, contributing to business-wide objectives and new product development. And with an in-depth view into both the finances and the strategy of the business, CPOs may soon be in a position to compete for the CEO slot.
It’s an exciting time to be in procurement, experiencing one of the greatest technological transformations of our time. While uncertainty and constant change can be overwhelming, I encourage leaders to seize this opportunity to rethink their roles and take the leap forward to become a contributor to the front line of the business, including strategy, product design and business model development.
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