Part 2: Essential Preparation
In the first part of this report on the future of the purchasing function, we examined the changes that buyers can expect by 2030. This second part discusses the need to prepare purchasing departments for the digital revolution, regardless of how far along the path to digitalisation they are now, by creating a clear roadmap for the entire company and having a solid pool of talent.
Purchasing in 2030: Digital Maturity
According to the recently published “Deloitte Global CPO Survey 2021”, digital transformation is now one of the top three priorities for CPOs, having experienced a sharp increase in its perceived importance (+20% in just two years!) Their first priority is to improve their operational efficiency, and the second is to reduce costs.
Purchasing departments going through their digital transformation must focus on two factors to succeed: rely on a clear corporate digital strategy, while maintaining a holistic vision of the digital transformation (without stopping at the automation of the Procure-to-Pay process, for example).
While some companies are still in their infancy in terms of digital transformation, CPOs can adopt several approaches to persuade senior management to initiate such a process. In particular, they can conduct a case study drawing inspiration from market leaders, align each step in the process with the company’s objectives, or even find an influential sponsor within the company. For purchasing departments who are already on track to formalise a strategy, it is important to focus on how this transformation fits into their company and to identify the technologies that will be really beneficial for their organisation, beyond their own department.
Purchasing in 2030: What is the Roadmap?
To carry out its digital transformation strategy, purchasing will have to prioritise the technologies to be put in place. To do this, you should first ask yourself a few key questions:
- Which technologies should be implemented as a priority?
- Which will be the most beneficial for the business?
- Which will result in the best return on investment?
- Which are relatively easy to implement?
According to the study by Deloitte, advanced analyses, collaborative networks, and robotic process automation are among the new technologies most frequently deployed in purchasing departments.
If we take a closer look at the “best-in-class” organisations we can see that they have also focused on Artificial Intelligence (AI) as well as predictive analysis. This is explained by the fact that Artificial Intelligence represents a major challenge for professionals. This technology is perceived as being one of the most difficult to implement, but also the one that could have the greatest impact on the purchasing process.
Purchasing In 2030: What Skills Will Be Needed?
To meet the challenges of Industry 4.0, digital skills will be increasingly in demand, as well as certain “soft skills”, such as the ability to adapt to change, agility, and flexibility.
To anticipate these needs, it is crucial that the purchasing function stays well informed and undergoes continuous training to embrace the changes taking place in the profession. While CPOs recognise that their teams lack both digital and interpersonal skills, training still focuses mainly on technical skills such as strategic sourcing, category management, negotiation, etc.
The Deloitte report underlines that the best strategies for developing talent in businesses are still individual coaching, mentoring and feedback sessions. It is also interesting to note that the most efficient organisations are twice as likely to rely on accelerated programs for young talent or master’s degree programs.
To reap the maximum benefit from this digital revolution, purchasing professionals will need to combine all of these approaches, prepare for the changes to come and make the right career decisions. This is why these themes are developed in the next sections of this report.
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