Over 300 procurement leaders from across ANZ have come together to deliver an unprecedented snapshot of the future of procurement.
Surfacing industry insights from the report prove the importance of procurement tech as more than an efficiency driver: it’s also an advantage lever.
It shows that technology supports businesses in moving to outcomes-based procurement that puts results first with a flow-on effect to processes and efficiency. As procurement evolves towards a strategic force for driving business growth, 65% of procurement professionals still lag behind, operating in a servicing capacity.
The report explores Australian and New Zealand procurement attitudes toward adopting future-focused procurement and examines the 5 main barriers to moving from a servicing capability to a strategic one.
Adopting an outcomes-first approach to procurement
Technology’s transformative power extends far beyond process improvement. It’s the catalyst that propels us towards a solution-oriented mindset, and this shift carries profound implications for how we approach challenges and achieve goals.
Technology fuels a solution-oriented mindset through enhanced data visibility, planning capabilities, and centralised processes. It automates and regulates procurement processes, leaving more time and resources for professionals to spend on relationship development and outcomes.
Efficiency becomes a by-product of the desired business outcome rather than the main goal, prioritising relationship building and results over processes.
Procrement innovators in ANZ are realising that the future of procurement lies not in micro analysing processes and tweaking every last client touchpoint – rather, it lies in an outcomes-first mentality that empowers procurement teams to tailor their processes to each contract and each relationship: what is the desired outcome, and how can we leverage our processes to make this happen?
Put simply, if you prioritise client outcomes, the processes will follow.
“Solution-oriented procurement means having a mindset that asks: what’s the right solution for this? How do I then apply the procurement process to deliver that, rather than simply following that process?”
– Head of Procurement, Private Sector
How tech enables an outcomes-first approach
- Data-Driven Decision-Making: With tools like data analytics, machine learning, and artificial intelligence, we can gather, process, and analyse data at an unprecedented scale and speed. This wealth of information empowers decision-makers to base their actions on concrete evidence, making informed choices more likely to yield successful outcomes
- Enhanced Planning Capabilities: Technology equips us with advanced planning and forecasting tools. Algorithms and software can simulate various scenarios, helping organisations and individuals anticipate challenges and develop robust strategies to address them. This forward-looking approach ensures that we are better prepared to tackle obstacles before they arise, reducing the likelihood of setbacks and increasing the chances of achieving desired results.
- Increased Visibility: Technology offers unparalleled visibility into processes and operations. Transparency allows us to identify bottlenecks, inefficiencies, and areas for improvement swiftly. Instead of adhering blindly to a predefined process, we can adapt and optimise in real time, ensuring that the focus remains on the ultimate goal.
- Enhanced Problem-Solving: The infusion of technology into problem-solving encourages an outcomes-first mentality. Rather than fixating on adhering to a rigid process or merely seeking efficiency for its own sake, individuals and organisations are increasingly oriented towards achieving meaningful results. Technology provides the flexibility to pivot when necessary, prioritising the outcome and adapting processes to ensure success.
- Efficiency as a By-Product: In this technology-driven paradigm, efficiency naturally emerges as a by-product of the outcomes-first approach. By focusing on achieving specific goals, organisations streamline their processes to eliminate waste and inefficiencies. This efficiency arises organically, driven by the commitment to achieving optimal results rather than being an isolated objective.
[Learn more about an outcomes-first approach to procurement]
Evolving from “servicing” to “strategic”
Strategic procurement enables a proactive approach to procurement that goes beyond providing a service and aligns with stakeholder and business objectives. The report finds that procurement teams operating in a strategic capacity are 3 times more confident than their peers, with 21% of strategic procurement professionals rating themselves as “very confident” that their procurement functions can meet their business’s changing expectations.
Procurement tech does this by automating and streamlining a lot of the “compliance” and “process” aspects of procurement, allowing more time and energy to be spent by procurement professionals on strategic and relationship-building aspects.
It allows professionals to focus on the “why” and the “what next?” rather than just the “how”.
How tech facilitates the move from servicing to strategic procurement
The integration of technology into procurement has ushered in a transformative era, one that transcends the conventional role of procurement as a mere service provider. In this new landscape, procurement has evolved into a proactive and strategic function that places relationships and strategy at the forefront, far surpassing the limited scope of basic compliance and processes.
- Strategic Procurement: Technology empowers procurement professionals to take on a more strategic role within organisations. Automated tools and platforms help in data analysis, market research, and supply chain visibility, allowing procurement teams to make informed decisions that align with broader business objectives. This strategic alignment ensures that procurement contributes not only to cost savings but also to revenue growth, risk management, and overall business success.
- Holistic Business Outcomes: This mindset extends beyond cost savings and focuses on achieving broader business objectives. Procurement professionals actively collaborate with suppliers to align their goals with those of the organisation. The emphasis is on delivering value, innovation, and long-term sustainability, thereby contributing directly to the organisation’s growth and success.
- Relationship-Centric Approach: Buidling and nuturing relationships with suppliers has become paramount in the modern procurement landscape. Technology facilitates this by providing data-driven insights into supplier performance, transparency, and collaboration between buyers and suppliers, fostering long-term mutually beneficial relationships.
- Compliance and Process Automation: Technology plays a crucial role in automating and streamlining compliance and process-related aspects of procurement. Tasks like supplier onboarding, contract management, and regulatory compliance can be efficiently handled by procurement software, reducing the administrative burden on procurement professionals. This automation ensures that compliance is maintained while freeing up valuable time and resources for more strategic endeavours.
Technology has elevated procurement from a back-office function focused on compliance and processes to a strategic, relationship-centric powerhouse. By automating routine tasks and providing valuable insights, technology liberates procurement professionals to concentrate on building strategic partnerships, driving cost optimisation, and aligning procurement strategies with overall business goals. This shift not only enhances efficiency but also positions procurement as a key driver of organisational success in the modern business landscape.
[Learn more about technology’s role in shifting from servicing to strategic procurement]
“We found [the lean agile procurement process] a very positive ‘value add’ methodology which ensured we made the right decision for our organisation in a timely manner, but also in a manner where a positive and trusting working relationship with the Portt team was established from day one.”
– Robert West, General Manager, Dunedin City Council
Prioritising the procurement customer experience
Shifting to a procurement customer experience mindset places business partnerships at the core of procurement, taking a holistic view of strengthening business outcomes.
According to the report, the principles of procurement customer experience (PCX) are intrinsically linked to the shift from serving to strategic. In providing a genuine value-adding service, people, relationships and partnerships must, by definition, form the basis of procurement functions.
“What we achieve is measured by better outcomes for our business or a member over time. My
business strategy is not focused on how to do things cheaper. The main objective is how to do
things better, how to give someone more value.”
Head of Procurement, Private sector
How tech facilitates the move from servicing to strategic procurement
Technology plays a pivotal role in enabling this transformation by enhancing the customer experience for suppliers and facilitating a more effective, value-driven procurement ecosystem.
- A mutually beneficial approach: A procurement customer experience mindset places supplier relationships and outcomes at the centre of decision making. It recognises that suppliers are more than just transactional entities; they are strategic partners critical to the organisation’s success. The approach values open communication, mutual respect, and collaboration, fostering a sense of partnership that goes beyond simple buying and selling.
- Technology-Enhance Customer Experience: Technology is the driving force behind creating a smoother and more engaging customer experience in procurement. It provides various tools and platforms to facilitate this, including:
- Online Portals: Supplier self-service portals offer suppliers a user-friendly platform to manage orders, invoices, and communication with the organisation. These portals streamline interactions and reduce administrative overhead.
- Data Visibility and Transparency: Technology provides real-time visibility into procurement processes and transactions. Suppliers can track the status of their orders, payments, and performance metrics, ensuring transparency and trust in the relationship.
- Workflow Automation: Automation of procurement workflows simplifies and expedites the procurement process. This reduces errors and delays, making it easier for suppliers to do business with the organisation.
- Data Insights: Advanced analytics and data-driven insights allow procurement professionals to make informed decisions and provide feedback to suppliers. This data-driven approach ensures that the relationship is continuously optimised for mutual benefit.
- Relationship Outcomes: A technology-enabled customer experience builds confidence and trust between the organisation and its suppliers.
- Enhanced Trust: When suppliers have access to accurate and timely information, they can rely on the organisation’s commitment to fair and transparent dealings. This trust is the foundation of a strong, long-term partnerhsip.
- Engagement and collaboration: Technology fosters engagement and collaboration between procurement teams and suppliers. Online communication tools, document sharing, and project management platforms make it easier for both parties to collaborate on projectss, resolve issues, and drive innovation.
Embracing a procurement customer experience mindset redefines the role of procurement from a transactional function to a strategic partnership. Technology is the enabler that ensures this shift is successful by providing the tools and platforms needed to create a seamless, transparent, and engaging supplier experience. This investment in procurement customer experience strengthens business outcomes, fosters collaboration, and positions procurement as a value-driven organisational function.
[Learn more about the role of technology in procurement customer experience]
The future of procurement in ANZ
The benefit of procurement technology in driving better business outcomes can’t be overstated. Leaders in ANZ increasingly recognise the power of tech in leveraging business-wide advantages: elevating their procurement approach from servicing to strategic, improving their procurement user experience and enabling an outcomes-first approach to their business partnerships.
Procurement teams are now in an unprecedented position to help businesses weather the storms of market volatility and uncertainty by delivering sustainable business advantages.
Read the full report to understand the current, service-centric state of procurement in the ANZ region, the strategic future procurement innovators are working towards and the 5 key barriers to this future.
