Where is procurement and technology heading in 2012?

Posted in: Analysis  
Where is procurement and technology heading in 2012?

Another year has whizzed by and we recently put our heads together at the Science Warehouse towers to look at the year ahead. How is the spend management and technology landscape likely to change over this period and what will the focus be for procurement colleagues in 2012?

As we come to the end of 2011 the economic outlook has probably never been more uncertain than at present. At the same time, with low business investment and public sector austerity the need for procurement skills and capabilities has never been greater.

Contributing their thoughts in our roundtable were Greg Staryk-Mills, James Hull, Jon Moody, Jonathan Betts and Steve Kerridge with Sonia Ali as interlocutor.

SA: How will the technology landscape change over the coming year?

JM: Use of the cloud will increase. You might think that this is a fairly safe prediction but what I mean is proper cloud-based solutions designed and built around a cloud infrastructure. Too many providers put ‘cloud’ on the tin when the reality is a creaky old legacy boxed system that has been ported on to a hosted server somewhere.

In addition to the advantages of accessibility and scalability, only a properly architected system like Science Warehouse can provide the aggregated view to drive benchmarking which is an increasingly important tool in the spend management armoury.

JH: Mobile web is the web. It has been shown that users who get a poor experience in mobile are not likely to return to your site on a desktop. The smart strategy in 2012 will be to treat the various means of accessing your content (be that a site, web or mobile app or API) as a continuum not different worlds requiring different strategies.

JH: Apple is the new Microsoft. Apple is in a stronger position than Microsoft in the nineties and its dominant position will have a number of consequences. The fact that Apple now sells more iPads than Dell does PCs reinforces the importance of mobile web. On the downside there is the danger of slowing innovation – Lion appears to have reversed the trend of leaner and swifter iterations set by Snow Leopard.

SA: What will some of the key drivers in procurement be?

GSM: Continued economic turmoil will keep the focus on procurement. With many suppliers already the focus for cost down initiatives the next step in the procurement curve will be ensuring savings are delivered through improved spend control and compliance.

SK: Driving value from data. There has been an explosion of data, and analysing large data sets—so-called big data—will become a key basis of competition. This is not something that can be left to a few data specialists but will need to be addressed by CPOs as part of their strategy for driving value in procurement. Procurement departments should be well placed to capitalise on this as they already have the capabilities around aggregating, segmenting and interpreting amorphous data sets.

JB: Not all about cost. Managing cost will continue to be the focus for the majority of purchasing departments but procurement skills and practice will become increasingly important across the enterprise. In an environment where growth is hard to come by supply chain and Supplier Performance Management can become key differentiators for businesses.

Dealing with market volatility and ensuring security of supply will be key for many organisations. This focus on direct spend will accelerate the move towards outsourcing indirect spend so there will be a continuing growth in BPO deals.

SA: What about procurement technology?

JM: The rise of social procurement. That’s not buying ‘social’ but driving better purchasing through the interconnectedness of buyers. An example of this will be in harnessing both the cloud architecture and the knowledge of what people have bought in the past to allow connections to be formed and efficiencies to be created in buying within and between organisations.

JB: Procurement Jim but not as we know it. At a recent Spend Matters event Jason Busch talked about the death of procurement. Attention grabbing perhaps but a natural consequence of Active Spend Management where procurement tools and technology are so easy to use that procurement best practice is embedded within an organisation so it runs itself.

GSM: Driving organisational change. Technology offers the possibility of moving away from legacy processes through change by stealth. The leading technology providers offer solutions that are so easy to use organisations can drive change in practice with ease.

JM: Predictive analytics. Increasingly sophisticated reporting tools and unified data sets within and between organisations and sectors will drive intelligent spend analysis and forecasting.

SA: Any other predictions on the year ahead?

SK: Death of email. It has been predicted before but 2012 will be the year that the use of social media tools really takes off in the workplace.

JB: The Olympics will come in under budget.

SK: England will win Euro 2012…

Over the coming year each month we will be looking in more depth at some of these subjects and other key areas in our ‘12 for 12’ series. If you would like to contribute any thoughts on procurement and technology trends in 2012 just let us know.

Feel free to post your comments or any predictions you have for 2012 below.


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