The Future of Procurement: 2020: Talent Competition Heats Up

There is consensus that the talent pipeline is too thinly populated to meet the expected demand for strategic sourcing professionals in 2020. The CPO will need to function as a magnet for procurement talent by promoting global talent, utilizing state of the art technologies, training people broadly, and ensuring they are positioned to move up into bigger roles.

The emerging workforce has very different motivators. The younger generation wants the latitude to pursue all of their interests, both professional and personal. Flexible work arrangements, non-traditional compensation models with bigger bonuses and variable compensation tied to individual and team performance will become common. Companies will need to ensure that the procurement staff remains visible in the organization, and that people are developed so that they are promotable.

Adapted from VISION 2020: Ideas for Procurement in 2020 by Industry Leading Procurement Executives http://bit.ly/kIwoW3

The Future of Procurement: 2020: Outsourcing Explodes

Non-critical, transactional procurement activities currently done in-house that will likely be outsourced by 2020 include:

• All transactional processing, including POs, invoices, and payments.
  
• All non-strategic spend category management, such as leveraged commodities.
  
• Supplier catalog and contract management.
  
• Sourcing event execution.
  
• Data gathering, analysis, and reporting activities.
  

What will remain in-house will be the critical strategic spend categories. This will require procurement staff capable of strategic thinking, and who are capable driving innovation.

Adapted from VISION 2020: Ideas for Procurement in 2020 by Industry Leading Procurement Executives http://bit.ly/kIwoW3

The Future of Procurement: 2020: Everything will be Automated

What will Procurement look like in the future?

• There will be a move away from traditional ERP systems to web-based, open architecture systems that are able to interface with many systems in a company as well as its supply base.
• Centralized purchasing will become a thing of the past as end-users handle routine transactions in non-critical spend categories. Buying will be done by the people who use the goods and services. The sourcing system will enforce workflow and compliance.
• End-users will produce agreements that meet minimum criteria. Exceptions will be escalated to Sourcing.
• Contract management and administration will be automated, and will use templates and collaborative tools.
• Risk management will be built into the systems and processes. They will no longer be ad hoc initiatives.

Adapted from VISION 2020: Ideas for Procurement in 2020 by Industry Leading Procurement Executives http://bit.ly/kIwoW3

The Future of Procurement: 2020: The rise of Service Providers and the Evolution of In-house Procurement

What will be needed in 2020 are people who can take information and proactively develop strategies that advance an organization's priorities. The skills most needed will be those that directly drive profitability, such as:

• Financial assessment
  
• Relationship building
  
• Team management
  
• Ability to drive internal and external collaboration
  

Those who excel at sourcing processes, or at being power users of procurement systems, but who lack the above described skill set may find themselves working for a third party service provider in 2020, or not working at all.