Keith Hausmann explains why the time is right for procurement to expand its influence across the organization and deliver the future of sourcing today.

Although procurement includes a broad remit, the key objectives for procurement leaders across industries remain those of driving lower costs, ensuring availability and supplier quality, and driving compliance. However, companies are experiencing a paradigm shift in the way they procure goods and services with the advent of new operating models, talent, AI, and digital technology.

On top of these factors, the increasingly important environmental, social, and governance (ESG) agenda offers a unique opportunity to make procurement much more strategic and valuable as well. As we all know, this no longer just relates to what happens inside an enterprise but more broadly reflects the impact an enterprise’s entire supply base has across the countries in which it operates.

Five steps to success

While the time is right for procurement to increase its influence across the enterprise, enabling inclusive, competitive, and sustainable self-serve sourcing for every strategic need, this can be easier said than done. In order to create this bold vision of tomorrow’s procurement model, companies must redefine how they procure goods and services, adopting five new guiding principles.

These principles involve turning key aspects of the function on its head and viewing them differently. Procurement should shift its focus beyond overseeing processes and ensuring savings and compliance to finding new and innovative ways to increase strategic value to the whole company and deepen relationships with suppliers.

The pillars of digital transformation

This transformation can be driven by reimagining how a company procures goods and services, using innovative technologies such as AI and advanced analytics to help procurement to work more efficiently and become more user-friendly. When managed correctly, modern technology can contribute toward a best-of-breed procurement ecosystem that provides an elevated stakeholder experience, superior provider quality, lower total costs, and increased collaboration. At the same time, freed from manual, repetitive processes— procurement talent can focus on partnering with business stakeholders to achieve their strategic goals with KPIs that match this new vision of procurement.

Understandably, procurement leaders are excited about the opportunity to positively impact the future of the global economy, using their company’s spend to enable its ESG strategy by ensuring all business is awarded fairly and transparently, and that suppliers across the value chain share the same sustainable values. Even before the COVID-19 pandemic, stakeholder expectations were evolving and becoming more demanding. Digital transformation has profoundly accelerated across businesses, regardless of sector, and a new procurement operating model is now a requirement, not an option.

Delivering the future of procurement

Leading CPOs agree that the time is right to seize the new opportunities afforded by new ways of working and modern technology. These procurement leaders are implementing platforms that not only deliver visibility, efficiencies, and cost savings but also drive strategic growth and create enterprise value. A Globality survey of 101 procurement executives revealed that 97% agree digitization will advance their strategic goals; however, less than 5% are fully digitized in a manner that meets or exceeds stakeholder expectations. To meet these goals, the time is right for CPOs to adopt the five bold new guiding principles that will allow them to deliver the future of procurement today.

Learn more about the five principles by downloading the white paper.