Procurement 4.0: We are Borg?

One of the more interesting talks at Ivalua Now Paris was Natacha Trehan’s (of the University of Grenoble Alpes) talk on the “Future of Procurement”. In it she said that in the noetic economy of tomorrow, Procurement’s function will be to drive complex ecosystems on hyper connected platforms that empowers a neuronal organization that values collective intelligence.

I don’t know about you, but it sounds to me like we’re going to be part of the corporate Borg. For those of you who don’t know what the Borg are, they are a fictional alien race of cybernetic organisms in the Star Trek franchise linked in a hive mind called “the Collective”. They expand by way of assimilation where they forcibly transform individual beings into drones by way of nanoprobe injections and cybernetic implants. And their motto is “resistance is futile”. Which often seems to be the case once a large enough organization embarks on a given trajectory.

So why does she think we are on that path? Which, except for the neuronal part sounds great to the doctor because Procurement does need to learn to drive complex ecosystems on hyper connected platforms that empower a knowledge-driven organization that values collective intelligence — he’s just not fond of the “neuronal” aspect that can be easily misconstrued and misapplied.

Because the biggest future challenge for Procurement, once an organization reaches and masters 3.0 (and almost no organization has), is to reinvent the business model. Once procurement has achieved its sustainability of supply, cost reduction, and risk management objectives, it needs to be able to continually create value to elevate its function and maintain its central importance to the business. Be it supplier development, new product introduction, innovation, or business transformation, Procurement will need to serve up what the business needs.

As Natacha says, Procurement will need to become more entrepreneurial and energetic and harbour the propensity to shake up routine and define innovation. After all, once you’ve squeezed the fat out of the margins, optimized the production and distribution process, and minimized the risk, the only way to find value is to truly innovate the product or service.

Plus, as resources continue to become scarce, regulations continue to multiply, and trade winds continue to change, more and more innovation and creativity is going to be needed to meet sustainability goals.

And then there’s the fact that more and more product-oriented markets are transforming to as-a-service markets. People aren’t buying, or even leasing/renting, vehicles anymore, they are switching to uber-like models in both their personal lives and their business lives. Who knows what will be next.

Plus, as companies progress on their Procurement journey, they all want the same, most innovative supplier as they admit only so much innovation can happen within their four walls. This will shift the balance of power back to the supplier unless you are the most advanced, and best, customer to work with (in which case the odds will be about even as they will want you as a customer). “Customer of choice” is going to be measured not on dollars and volume, but what you bring to the table.

In other words, the Procurement function will need to continue to change, continue to advance, continue to collaborate, and continue to connect … but let’s make sure to avoid those neuronal implants, just to be on the safe side. 🙂