The future of procurement: four scenarios

The recent Cambridge Analytica scandal has sparked a fierce debate about the handling of personal data by companies. Could this impact the future of procurement?

Speaking at the launch of the 2018 CIPS/Hays Procurement Salary Guide and Insights report, a PA Consulting team led by JJ Van Der Meer explained how things could change, from policies to roles to processes.

Van Der Meer said: “Using big data will help procurement develop supply chain tiers. If combined with AI, it will become easier to spot risks faster than anybody else.”

According to Van Der Meer, the future is multidimensional, uncomfortable and determined by today’s actions. As a result, there are a few steps procurement professionals can take to prepare themselves.

“What question do you want to answer given everything that is going on?” he said. “What are the sets of variables that affect future outcomes? And what is the future of the procurement function?”

Based on an axis of the degree of data access companies will enjoy plotted against the severity of regulation, PA Consulting has come up with four potential scenarios for procurement in 2028.

1. New rules: Procurebot world

What is it? This world is born out of concerns over the 2018 Cambridge Analytica scandal. An international protocol and treaty of data is approved and governments invest in a free-to-use e-marketplace. The market is dominated by mass customisation and short supply chains. In this world of information, customers can see how products and services are made. Data analytics, blockchain and robotics are everywhere and production is entirely automated. Regulation dictates processes and traceability requirements. As many jobs are automated, the war for talent intensifies.

What skills will you need? Successful CPOs in this world will have a strong operations background. They will be comfortable with the regulatory environment and will be strategic and creative thinkers able to understand upcoming trends and to drive change. Innovation and agility will be highly prized, over experience, as procurement teams shrink.

2. Ticking the box: Enforcer world

What is it? High profile data losses lead to the creation of a ‘Ministry of Data’. Free trade deals have expired and people have lost faith in AI after a fresh economic crisis. Data is heavily regulated, due to global cyber warfare and GDPR legislation. This is a highly regulated, data-restrained environment.

What skills will you need? The mantra: tick your boxes, do your checks. If you want your business to survive, compliance is king. A legal or financial background will be advantageous, along with attention to detail and the ability to deal with evolving regulation. Procurement teams will be larger, with a range of compliance, sourcing and contract management specialists.

3. Data is king: Politician world

What is it? A data-rich, deregulated utopia. Investments in blockchain-based supply chains accelerate and a data-facilitated economy arises. Procurement needs to guard the value of the organisation. With mass customisation, businesses use data to delight customers. User profiles provide personalised recommendations, asking people to rate items in return for discounts. Suppliers pay for this information and businesses make great use of analytics.

What skills will you need? Diplomatic and influencing skills are key, being able to persuade stakeholders towards the right suppliers. An ability to deal with data and act with transparency will also be important. It’s people skills that matter most here to generate value. Release your inner politician. 

4. Back to basics: Trader world

What is it? Following the 2018 Cambridge Analytica scandal, there is huge public outcry over data, although limited regulation is imposed. Digital adoption plummets, with tech companies going bust. Information is siloed and procurement teams can’t access information about markets and competitors. Security is key and supply chain visibility very low.

What skills will you need? Traditional trading skills are critical, with procurement striking deals with limited visibility, and freed from much compliance. Rather than having data scientists, you need people with strong networks and experience, who can secure the best prices.

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