Keystone Column 86: The Future of Procurement

Keystone Column 86: The Future of Procurement

Welcome to this week’s column. This week, we focus on a report issued by KPMG on the future of procurement. We conclude with links to the key sources of contract notices for Ireland and international markets.

New paper on the future of procurement”

Global Advisory Firm KPMG has published interesting research in relation to the future of procurement as a competency. As is often the case with these papers, they often prismatically project ideas related to the services the professional services firm offers. Not unreasonably, the services they offer shape much of their perspective on the world. In terms of the potential changes that they envisage in the future of procurement, we have selected some ideas that we believe have the potential to be very high impact in general.

 

Future of procurement – Strategic opportunities:

Urban mining:

the logical follow-on from the sharing economy will drive the reuse of materials from the urban environment rather than extractive mining. For instance, rare metals in defunct phones would be reused. Copper from wires replaced by fibre optics will be reused etc. They estimate this becoming an established part of the way we live by 2030. Our view: hard to see any downside but we think it is probably only accurate for early adopter economies only.

Smart contract management:

While the language used is somewhat hedged, the paper posits the view that contract management can be done in a matter of minutes using algorithms, it further suggests risk management can be largely automated.

Our view: an interesting idea that could have a dramatic impact on routine or call-off order contract management. We do not necessarily see the benefit on more collaborative service offerings. There is a difference between what can be done and what is needed.

Future of procurement – Procedural opportunities:

Networked benchmarking:

Companies that do not compete directly share data to compare their performance and qualities. They learn from each other’s best practices. They use a common platform to submit and review data.

Our view: there are companies like Hackett that do this at a global level. This would appear to allow companies cluster and proceed to share practice in small groups. In the EU, data sharing like this must be capable of demonstrative positive benefits. If the best practice results in destructive or coercive tactics being used against SMEs or consumers, it is harder to see where the benefit comes from.

Total traceability:

The paper puts forward the view that pharmaceutical levels of traceability will be widely available to all materials & sub-components.

Our view: the paper fails to put forward any case as to why this would be beneficial on a systematic basis. There seems to be an assumption that all data is desired, necessary and/or beneficial when many products / services can be provided with less than perfect data.

 

Future of procurement – Organisational opportunities:

Simultaneous Language Translation

This category is the weakest one but one are outlined is simultaneous language translation by the year 2030. They suggest that real-time solutions will be in place that can eradicate the language barrier.

Our view: this is already on the way and is extant in certain cases already.

 

Future of procurement – Technological opportunities and enablers:

Augmented reality

With the assistance of AR and data glasses, buyers will be able to access data like prices, inventory and user related data by simply looking at a piece of data or a product. The data will be available in real-time and enable the projection of holograms of products / articles.

Our view: this could greatly assist buyers and the technology to provide these various scenarios is emerging.

Conclusion 

A total of 25 concepts are outlined in this paper on the future of procurement. To our mind, the others are either going to happen or we don’t see them as having a big (or any) real impact as things stand today. It is an interesting and very useful contribution that can help us understand how tomorrows world may work.

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Finding Public tenders

Over 100 tenders issue every week, we have been tracking these tenders for nearly two years now and know that almost all industries and sectors have opportunities. Opportunities present in almost every conceivable category of good or service.

Keystone recommends:

www.etenders.ie – register to obtain the latest tenders from State bodies

www.supplygov.ie – the latest lower value tenders for trades / supplies from local authorities

www.tenderscout.com – a tender engine highlighting opportunities in Ireland and overseas