7 Megatrends for the Future of Procurement

“Look 10 years from now, and what will you see in this conference?” started Saki Boukas in his opening remarks in the Nordic StrategyForum for Procurement and Supply Chain in Riga this week, “will it be computers talking to each other instead of people, or will it be the 15 year old gamers who sit here in our place?”

It was broadly agreed in Riga that much will change in the field of procurement over the next 10 years. Lucky for you, we took notes and can share some of the top megatrends identified by the distinguished speakers in the largest gathering of Nordic senior procurement executives.

1. You can’t rely on riding the fall of commodity prices

In his opening remarks, Saki Boukas from Stora Enso reflected that procurement professionals may have had it easy in recent years with falling commodity prices, and cautioned that things may not be as easy over the next few years.

2. Speed and execution is a source of competitive advantage

Many organizations look to leverage volumes and harmonize practices across the whole organization to gain efficiency. Peter Høygaard from ISS argues that in a “Cash Now” model, the procurement team’s speed and ability to execute are also keys to success.

3. Pay attention to cognitive solutions

Big Data is nothing new, but the question Abdulkadir Tekin from Capgemini IBX Business Network asks is how will procurement functions apply these new opportunities in practice and not theory. His insight is to focus on “cognitive solutions,” ways in which computers can learn to think like humans.

4. Combine internal and external data sources

Many companies have detailed visibility on internal data, on costs, supplier contracts and so on. As more big data solutions emerge for external signals, like the weather, commodity prices, and other factors, co-founder of Sievo Sammeli Sammalkorpi argues that a source of future competitive advantage will be the ability to combine internal and external data sources.

5. Through Internet of Things Big Data is already here

While there is broad agreement that big data is a trend of the future, Søren Grubbe from FLSmidth points out that the Internet of Things makes big data already a factor of today. For example, sensors can send data from remote operations globally to a central hub and provide accurate predictions about the cost and need for maintenance.

6. To get more buy-in, talk the talk

At times procurement can be seen as an isolated function, but Thor Ingvar Huuse from Orkla argues that you can achieve more if you collaborate and use the same language and KPIs as other functions, like marketing and R&D.

7. Leadership and culture drive change

Agreed savings is one thing, but how do you realize savings across a whole organization? Kari Tulisalo from UPM Kymmene observes that real change can be effectively lead by the CEO, and reflected across an entire organization through a shared spending culture.

All of this, and more was discussed in Riga this week. Let us know about other megatrends on LinkedIn or Twitter!