Beyond Trends: Industry Experts And Practitioners Weigh In On What Will Matter Most To Procurement Pros in 2019 No. #6

Posted on February 25, 2019

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As a lead-up to my Beyond Trends: Transformational realities redefining procurement panel on March 12th, I reached out to people in the procurement world asking them a simple, and somewhat straightforward question; in your opinion what do you believe is or will be the single most significant development that will impact procurement in 2019?

In this sixth post in the series, Phil Broughton who is the Head of Business Programs – The Americas, as well as Development and Engagement for The Chartered Institute of Procurement & Supply, tells us what he believes, is “the single biggest development that is, and will continue to impact procurement; Risk.”

“Major markets and global economies are facing significant challenges as trade wars introduce unexpected tariffs, Brexit is introducing uncertainty and the potential for unprecedented disruption to supply chains, and the focus on ethical issues continues to pile pressure on the need for clarity and visibility throughout the tiers of suppliers serving organisations as consumers become more socially conscious. As a result, businesses are increasing the call for their procurement and supply professionals to take responsibility and mitigate risks.”

Phile then adds:

“The challenge is whether the teams have the capability to understand the risk to and impact on their supply chains and whether they can do something about. These challenges will test strategic sourcing plans and may well require considerable re-engineering of existing arrangements. For sure, the business discussion that procurement and supply will lead will take place higher up the management ladder and again will require high levels of commercial understanding and capability. For many organisations, this will require significant investment in the development of people and processes.”

One would be hard pressed to argue with such an assessment, especially in a rapidly expanding digital marketplace where technology, i.e., people and processes are the foundation for realizing increased efficiency and competitive advantage.

A recent Activate Digital 2019 post that cited a January 3rd, 2018 ZDNet article speaks directly to the technological element of said risk by way of the following excerpt:

“The ZDNet article highlights cybersecurity has a “top risk area” for business leaders. Specifically, a report that confirms why for executives and board members cybersecurity is of greater concern than economic uncertainty and regulation. Advancing your digital transformation strategy cannot happen without addressing said concerns.”

With further research, I came across another article by the Director of Cybersecurity for Cisco Canada which references a report from North Carolina State University regarding the risks associated with the advancement of technology.

According to the report, what was “of greater concern” to company leadership in 2018 than both economic uncertainty and regulation was that the “rapid speed” of disruptive innovations and new technologies “would “outpace” an organization’s ability to manage risk effectively.”

Given the above, it is clear that perhaps one of the main reasons why according to a McKinsey survey of the 23 percent of organizations that have a digital reinvention strategy just 2 percent involve their supply chain.

In short, I believe that technology and more to the point digital transformation is the key to not only recognizing risk but managing and mitigating risk associated with globalized supply chains.

In the next installment in this series, another industry thought leader will be offering their views on what will have the most significant impact on the procurement world in 2019.

In the meantime, be sure to reserve your virtual seat for the Beyond Trends: Transformational realities redefining procurement panel.

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