What does the future hold for Procurement?

What does the future hold for Procurement?

I am no Madame Zuleika but indulge me for a moment as I set out my thoughts following three decades in the commercial field. For the majority of people working in Procurement, I think it is unlikely that they will be employed (in Procurement) in 10 years’ time.

Into a brave new world

Melodramatic? Maybe, but what makes me say this? Consider the technology that is already available and that which is envisaged in the next year alone and it is evident that it is going to bring wholesale change, not only to Procurement, but to the whole way in which we live.

For example, Amazon are about to open the first shop that recognises individuals from their phone as they enter, records their selections as they browse and charges their account (via the phone) for the cost of their purchases as they leave. That removes the need for checkout staff and enables automatic replenishment in the truest sense: the re-stocking order is transmitted, system to system, as the customer leaves the store. And will probably be delivered by drone or driverless truck not too soon afterwards.

In Procurement, we already have systems that produce contracts semi-automatically; within a year we will see the arrival of systems that link the suppliers’ and buyers’ systems together to enable automatic contract monitoring and recording. Deviations from contract (based on event-driven data) will be recorded automatically and flow through to invoicing adjustments as needed with no help from Commercial or Procurement personnel. Supplier systems will be quick to reduce prices in real time if they are not getting the volume of sales they require within given parameters on their portals.

Professor Richard Susskind is forecasting radical change in the legal profession through automation and artificial intelligence which will cause the removal of many lawyers as systems will take over much that they used to do for themselves.

I believe there will be an equivalent sea-change in Procurement. Procurement staff that do remain will become data-manipulators and interpreters, seeking ways in which to manage technology to deliver the best outcomes. They will do less negotiation (this will be done by the systems) and more approval of supplier compliance for entry to the supply platform, more performance measurement and more dispute resolution.

How should business prepare to cope with this change? Does it herald the arrival of a new industrial revolution where we see vast swathes of the workforce become redundant?

I shall set out a possible future for our favourite service, the NHS, in my next blog, using these ideas as a starting point.

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