Procurement is set to become a ‘pay as you go’ service, according to Emmanuel Erba, chief procurement officer, Capgemini.
Speaking to delegates at the Ivalua Now: The Art of Procurement event in Paris last week, he argued that the procurement is on a trajectory to being run as a service.
Erba pointed to the speed at which the ‘Big Five’ technology companies - Apple, Alphabet, Microsoft, Amazon and Facebook - can launch new products and services and the growing use of tools such as digital advertising.
“These forces are driving the market towards “everything as a service” and we in procurement will have to run as a service. There’s no way we can ignore it, either from a technology standpoint or because of the market dynamic.”
“Procurement is going to evolve into a pay-as-you-go model and CPOs all over the world are going to define their organisation as a service-based model,” he said.
The evolution of procurement can be compared to the evolution of cloud technology, and many of the capabilities of the cloud will be mimicked in procurement, according to Erba.
Procurement professionals will be able to delegate indirect procurement to focus on the core business, accelerate value capture, optimise scalability and be flexible in using resources by using “procurement cloud” capabilities, he said.
“We have to get core to the business. In other words, not buying for buying or procuring for procuring, but contributing to the value delivered to our clients and being an integral part of the value chain.”
To prepare for procurement’s evolution, we must “position the procurement organisation as a growth enabler.”
Procurement organisations must be geared up to embrace the disruptions, and using technology such as automation and data insights will give organisations the competitive advantage, he said.