Friend or Frenemy: How Technology Is Transforming Procurement [INFOGRAPHIC]

Amy Moore

At your organization, is procurement seen as the department of PO-cutters or innovators? Is it the department that impedes business progress…or that drives it?

Getting from the former to the latter, in terms of both perception and reality, is what procurement transformation is all about. And it’s happening. Oxford Economics surveyed more than 1,000 procurement professionals for insight into the future of procurement and found overwhelming agreement that procurement is playing a more strategic role in the organization. But while procurement is the hero in this transformation story, technology plays two critical supporting roles.

The dual roles of technology in the future of procurement

On the one hand, technology is like procurement’s best friend and confidante: supportive enabler, intelligence enhancer, critical to your success. In the Oxford infographic below, integrated supplier networks and “strong spend analytics” stand out as two such characters having a direct impact on non-executive practitioners’ ability to collaborate across the supply chain and guide strategic decision-making across their own company.

On the other hand, technology is like procurement’s frenemy — that cool, slightly dangerous character who disrupts your sense of security, arouses your competitive side, and fires you up to be faster, smarter, and more popular than ever. After all, those opportunities that technology brings are available to everyone else, too. This creates pressure—on your company as a whole—that comes through to procurement as a mandate to drive more value.

So technology is both the thing that simultaneously compels change and enables it. Procurement organizations that are first to make friends with social, mobile, Internet of Things, cloud, and other new technology capabilities will have the advantage. The same will be the case for those that turn to suppliers to help cope with technological change—a strategy currently employed by just under half of the respondents in Oxford’s research. Will this be their opportunity to do things faster, smarter, even totally differently—or will it be yours?

Today’s technology moderates, tomorrow’s enthusiasts

When asked what trends will have the biggest influence on the procurement function in the next three years, executives in Oxford’s research cite globalization, commodity pricing, and business networks—in that order. What could the execs have chosen for the third-place change-driver? Oxford’s full research report— available here with registration—shows that business networks beat out talent shortages, regulation, and geopolitical issues in executives’ assessment of pending impact.

A slightly different question is what technologies are currently important to the procurement function’s progress. Oxford asked executives to rate the importance of the aforementioned business networks, along with social, mobile, and other relatively new technologies. The majority of respondents (74% and up) say these capabilities are important. But, there’s further insight when you break down the meaning of “important”—with significantly more responses in the “quite” and “very” important categories than in the more tentative “moderately” important one.

If today’s technology fence-sitters become tomorrow’s passionate converts, procurement may be well on its way to becoming the company hero.

For more on the story of procurement, transformation, and technology, have a look at the Oxford Economics infographic:

For more insight on procurement, see What A Finance Executive Can Teach You About The Future Of Procurement.

About Amy Moore

Amy Moore is the Content Marketing Director for SAP Procurement and Ariba solutions. Her specialties include messaging strategy, content strategy, and content development.