Legal & General has developed a vision for the future of procurement under five pillars.
Daniel Keyworth, CPO at Legal & General, told ProcureCon Indirect in Copenhagen that “technology is driving significant change”.
He said: “For us to survive as procurement leaders we need to keep moving forward. Our stakeholders have changed and the products and services we’re buying have changed.”
The five pillars are:
1. Enabling self-service. Keyworth said procurement was “getting the business to do more in a safer way” and there was a plan to raise the self-service spend threshold to £250,000.
2. Better business partnering. “Reducing cost and managing risk hasn’t changed but the way they want us to do it has,” he said. “Cost is still important but people want things quicker, and more innovation.” Keyworth said there was a “drive to get us involved in more collaborative projects”.
3. Team organisation evolution. Keyworth said the goal for the procurement team was “making everyone a business partner”. “The team is being developed through more training and development.” This also involved automating non strategic processes and there is a target that by 2025 artificial intelligence will be used in 25% of transactional spend. There is another target that by 2021 there will be a 100% digital workflow with digital contract execution.
4. Driving disruptive innovation. “We want to ensure we get more value from our supply base,” said Keyworth. He said this was about “building that into sourcing processes”, but it was not without difficulties. “It does cost a lot of money to drive that innovation. We have invited suppliers in and no one has turned up and that has damaged the relationship.”
5. Being easier to work with for suppliers. Keyworth gave the example of construction, where materials are in short supply. “If we are not attractive and easy to deal with they won’t supply their products to us,” he said.
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