… in some cases this is money you should have been on a decade ago!

Let’s backtrack. As we noted in Part 1, McKinsey ended Q1 by publishing a piece on Procurement 2024: The next ten CPO actions to meet today’s toughest challenges which had some great advice, but in some cases these were actions that your Procurement organization should have been taking five, if not ten years ago. And, if your organization was doing so in these cases, should be moving on to true next actions the article didn’t even address.

So, as you probably guessed, we’re in the midst of discussing each one, giving credit where credit is due (they are pretty good at strategy after all), and indicating where they missed a bit and tell you what to do next if you are already doing the actions you should have been doing years ago. And, just like we did to THE PROPHET‘s predictions, grade them. In this third instalment, we’ll tackle the next three actions, which they group under the heading of:

OPERATING MODEL OF THE FUTURE

9. Digitize end-to-end procurement processes. A-

This is yet another action that you should have been working on since the first Procurement platform hit the market over 25 years ago, but an action that you likely couldn’t have completed until recently when the introduction of orchestration platforms made the interconnection of all systems used by Procurement affordable for the average company, even when the company needed connectivity with systems in Finance, Logistics, Risk, and Supply Chain to access necessary pieces of information for Procurement to adequately do its job. (Before these systems, you needed to be a large enterprise with a huge IT budget to afford the integration work to attempt this.) Plus, the “AI” tools you need to digitize paper documents used by old-school, classify data, process contracts to identify potential issues, etc. used to be too pricey — now that seemingly every vendor has them, they are affordable to.

10. Build new capabilities for the buyer of the future. A+

Prepare the organization for Procurement’s future by investing in new abilities for advanced market research, integrated technology, and talent development. Equip procurement professionals with deep insights and tools to understand and address supply market dynamics, risks, economics, and ESG. Given how supply chains have been in constant flux since the start of COVID, with no end in sight as a result of geo-political conflict, natural events (drought in the Panamanian canal) and disasters, supply shortages, rampant cost increases, and so on, the organization is going to need every capability available today, and a few not invented yet, to survive tomorrow. Start researching, testing, and developing now … before it’s too late. (Just leave Gen-AI out of the picture!)

So, putting it all together, the grades were B, B, A, B+, A-, A, B+, A+, A-, A+. Not a bad report card.