The Journey to Next Generation Procurement

Over the years, the role of procurement has evolved as organisations realised the impact good procurement has on the ability to do business or provide services to the community. Procurement used to be the ‘Corporate Police’ — slowing things down, ensuring compliance, and obsessed with pricing. Accordingly, most of the focus and dedication of resources in procurement teams was directed towards transactional operations (e.g., purchasing, payments, supplier performance management) and executing sourcing activities. But that stance only works for organisations to a point, and it certainly isn’t a recipe for innovation and growth.

Next-generation procurement teams have a strong bias towards value delivery. There is a clear understanding of the organisation’s strategy and that is reflected in procurement’s strategic imperatives. Procurement operations are automated and optimised so that resources can be redeployed to delivering value, which is important to the organisation and its customers. Importantly, next-generation procurement teams are appropriately enabled with the right capability, process, governance, data, technology, and operating structures. Without these, the value of procurement is nowhere near as great as it could be.