Collaboration between industries has become very important during the COVID-19 crisis. It has proven that we get better results from working together. Cooperation and collaboration between competitors has also emerged, and is allowing everyone to provide their greatest value by focusing on what they do best.

And that’s the future of procurement.

Outdated Process and Technology

Our traditional procurement process is very linear and very rigid. And it is completely and wholly inadequate to support the digital revolution and to manage a crisis like COVID. 

For the last 20 years, we’ve purchased suite solutions that were built on that traditional process. But the traditional procurement process and single closed-loop suite systems are

  • poorly designed
  • inefficient
  • unable to account the changing nuances of today’s landscape

We need better technology. And there’s been an explosion of new technology and new startups (Tealbook is a perfect example) that want to solve this problem and allow procurement teams to focus on strategic activities instead of tactical procurement.

A New Ecosystem of Microservices

The future of procurement technology will rely on a microservices-connected ecosystem of value-creating point solutions.

It’s a hub model in which you select the best of breed for your needs, not because you need a whole bunch of tools, but because you need to get precise in their capabilities to build your data lake.

By working with multiple best of breed solutions, you’re able to both get the best data and build relationships with a range of vendors. Another lesson the COVID crisis has given us is that a diverse and flexible supply chain is necessary to avoid collapse.

How to Choose Your Microservice Vendors

The new evaluation criteria to strategically determine which technology vendors to include in your hub are:

  • User experience
  • Quality of data
  • Analytics
  • Automation capability
  • Ability to do best of breed
  • Ability to grow the business

Start Using New Technologies to Create Value Now

You need to start thinking about these dimensions to evaluate vendors with a focus on what value you’re creating and how you’re creating it. 

Procurement is changing:

  • From Buyers to Total Value Generators
  • From Category Experts to Cross-category Solution Developers
  • From Analysts with Ad hoc, Reactive Analytics to Strategists Driving Real-time Insights
  • From Supplier Managers to Cross-value Chain Orchestrators
  • From being Driven by Savings Goals to Managing Balanced Scorecards

You can layer in any one of the new technologies and create value. You might have opportunities in sourcing. You might have opportunities in payment. You might have opportunities across the whole value chain. Just pick a couple and go after them. Start building your data lake by developing this collection of connected applications.

The fundamental processes underpinning procurement are outdated, totally inflexible, and just flat out wrong. We need to look at our suppliers holistically and with a lot more detail. Using an interconnected hub of best of breed applications will provide better value and better data.  The future of procurement will focus on collaboration. It will be vital to ensure that collectively we are successfully navigating whatever crisis comes next.

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