The future role of procurement and supply chain as a profession.
Historically, procurement has been viewed within the organization as a cost center that deals with straightforward transactions. Procurement functions are expected to continuously deliver lower costs, reduce supply chain risk and tighten control of spend. Yet, with the rapid emergence and evolution of new technologies, an opportunity now presents itself for procurement functions to be more than just cost centers. What comes next?
On 13 June 2017, KPMG launched Procurement igNite, an initiative to build the procurement community through a series of events. It aims to gather like-minded individuals to discuss how procurement professionals can embrace a philosophy geared towards modern digital platforms and technology.
Lyon Poh, head of Digital + Innovation, KPMG in Singapore, kicked off the first session, which focused on the strategic value of procurement and how the procurement function can bring additional benefits to the organization by leveraging on technology.
Michael Koh, Head of Procurement, Data Dimension and Council Member, The Procurement Council for Supply Chain Asia, spoke about how integration between business functions has changed over the years due to technology and digitalization. For example, contracts that were once handwritten are currently digital and can be consolidated using Contract Lifecycle Management. With the advent of cloud platforms and data centers, the cost of synchronizing shared services and standardizing category spend becomes even lower.
This resonated with Joseph Alfred, Head of Policy, ACCA, who strongly believes that technology will bring about further changes in the procurement function. He expected three key drivers to ignite the coming procurement revolution: Additive manufacturing with 3D printing, cognitive process automation, and blockchain.
Additive manufacturing, which allows for a distributed manufacturing environment, would evolve supply chains and perhaps even lead to the collapse of intermediaries. At the same time, cognitive process automation can exponentially transform supply chain through better visibility, while blockchain can bring end-to-end visibility of the supply chain. When used with internet of things, blockchain can also enable real-time monitoring and auto execution of smart contracts.
Besides technology, industry professionals also highlighted that the type of people hired also makes a difference. CPOs themselves need to own data and internally collaborate with different functions before implementing new technologies, and should look for knowledgeable staff instead of change agents who merely sell new ideas to the leadership. By hiring people who know data and the technology, CPOs can stay one step ahead and transform the function.
Overall, there is no doubt that the role of the CPO is shifting. In addition to their traditional roles, the procurement function needs to become future-proof, by being more forward-thinking and adaptable. They need to transform themselves into an agile adopter of innovation to deliver strategic insights at speed for the organization, and by doing so, they will be indispensable even in a highly digitized future.