Half of buyers facing technology ‘FOMO’

4 December 2018

While procurement leaders are investing in technology, not all believe that they have a solid understanding of how technology benefits their organisation.

In a survey, nearly half (48%) of procurement leaders revealed they are driven to invest in new technologies due to a ‘fear of missing out’ (FOMO) rather than because they have a true understanding of the digital requirement. Despite a lack of understanding, 63% have rethought their approach to new technologies.

Until now, people working in procurement have tended to be dealmakers and good at negotiating and building relationships, but going forward they will need to be far more analytical, Simon Whatson, principal of Efficio, told SM. Implementing digital technology allows procurement leaders to make decisions on suppliers with a more analytical approach, rather than purely based on past experience.

Whatson said: “The benefit to this analytical approach is that you get better outcomes whether that be higher savings, long-term financial benefits or even better service from suppliers. At the moment a lot decisions are made based on past experience and people’s knowledge, so deciding to go with one supplier or another is often down to someone’s perception rather than actually understanding how that business is going to add value.”

The survey, conducted by Efficio in cooperation with Cranfield University, also shows that 72% of procurement leaders believe they lack the talent in personnel that can harness the power of machines, which prevents technology from delivering the expected benefits, while a two thirds (66%) cite poor support from vendors as a barrier.

Whatson believes education and retraining of staff is crucial to allow procurement professionals to maintain the same employment opportunities going forward, with a focus on using data more effectively and implementing and understanding new technologies. As well as education, procurement leaders need to have a more collaborative relationship with vendors in order to reap the benefits of technology.

“Have an idea of what outcomes you want in future, irrespective of technology, and talk to vendors now about what their ideas are and how you can achieve that. It’s very different to going out with a specification that you internally have built up, for a gadget that you don’t understand, to give a benefit that’s not defined. You need to speak to people in the industry, especially the vendors where all the innovation is coming from to find out how they can help you on that journey. It really does need to be a journey and not a one-off exercise in investment,” Whatson said.

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