Automation to play larger role in procurement, says new study

ProcureCon’s Annual CPO Study released today indicates that procurement is looking forward to greater levels of automation, Big Data utilization, and more internal client-friendly sourcing tools.

“Exploring the Role of Technology in Procurement’s Strategic Transformation: A Look Forward Into 2017,” also contains key findings that point to strategic elements of procurement widely coming to focus on the concept of value creation.

Worldwide Business Research (WBR) and the ProcureCon conference team each year to produce the study, by conducting a benchmarking survey and speaking with scores of supply chain executives.

Andrew Greissman, WBR's Procurement Industry Analyst, says 50% of CPOs believe that they should report directly to the C-suite.

“This finding indicates just how robust the leadership in the department is becoming under a centralized banner,” he says. “The department is coming of age, and other business leaders should expect them to claim their seat at the table.”

In an interview with Supply Chain Management Review - a sister publication - Greissman notes that 69% of CPOs report that they have a consultative relationship with other departments.

“Procurement is no longer the paper pushing department they were before- they are the resident value experts in the company, and are taking a front seat in helping other groups complete their missions,” he says.

Surprisingly, 42% of CPOs haven’t yet had the time to evaluate the impact of as-a-service solutions providers, observes Greissman.

“As the market shifts to these style solutions, it would make sense for Procurement to get ahead of evaluating the direction that this technology is going to take them,” he adds.

Key data points in the report include:

-          52% of respondents are moving towards their goal of full strategic transformation on schedule, while 31% of respondents aren’t satisfied with the pace of change within their organizations

-          24% of respondents now report directly into the C-Suite of their organizations with 50% of respondents believing that is the ideal setup

-          29% of respondents still place their level of value as neutral, neither valued nor actively ignored, though 3% do state that they are actively being undervalued

-          26% of respondents stated technology it’s their most pressing area in which to improve with 35% stating strategy demands the most attention

According to WBR researchers, centralization of procurement may not mean scrutiny of purchases made across a global organization. Instead, a “Procurement Center of Excellence” now serves as a strategic command center and provider of consultative value optimization, while recognizing that certain commodities cannot be effectively globalized.