Procurement is increasingly viewed as a strategic resource and key driver of business value, according to research.
The Future of Procurement, a survey and series of reports from Oxford Economics conducted with support from Ariba, surveyed 1,000 procurement executives and practitioners globally.
It uncovered three major trends of increasing collaboration, use of technology and data.
In the survey, 63 per cent of the practitioners said procurement was more tightly aligned with other parts of the business, while 51 per cent of executives said the function was working more closely with suppliers.
The research also found an accelerating trend in automating key tasks to improve performance and productivity. Around a third of executives and practitioners surveyed said investment in procurement and supply chain technology was a priority. Nearly half said they intended to fund supplier innovation programs. Some 70 per cent said they expected invoice management to be completely or mostly automated within two years, closely followed by strategic sourcing and contract management. And 35 per cent expected business networks to have a significant impact on procurement in the next three years by enabling new, more efficient ways for companies to collaborate with their global trading partners.
The report concluded procurement now had vast amounts of transaction-level data from its supplier, customer, and partner relationships, and this was creating value across an enterprise, and further elevating procurement’s status within it.
Sixty per cent of practitioners said procurement data was being used across their organisations to drive more strategic decision making. Two thirds said procurement was playing a more strategic role within the organisation, becoming less a service and more a function.
Half of executives said budgetary and personnel investments would increase or increase significantly over the next three years, and an equal number said it had already increased over the past three years. Recruiting new people and investing in training and skills programmes are top priorities, along with spending on procurement and supply chain technology.
"Procurement has undergone dramatic changes in recent years, becoming more collaborative and technology-driven than ever before,” said Edward Cone, deputy director of thought leadership, Oxford Economics. “And this is fuelling greater payoffs not only in terms of the cost savings and efficiency that the function has traditionally been on the hook to deliver, but also innovation and overall financial performance.”