Oxford Economics recently partnered with Ariba to gain a better picture of how procurement organizations around the world are making their vision for the future a reality. To learn more about the findings of that project, I spoke with Emily Rakowski, Vice President of Marketing at SAP and Ariba. If you’ll be in Munich for Ariba Live (8 to 10 June), sign up for the Future of Procurement session to get a full overview of the research results and say hi to Emily in person. If not, you can pre-register here for the executive summary.
Q. Why did Ariba conduct a study with Oxford on the future of procurement?
We felt two things were missing from much of the research already done on the future of procurement. One, the practitioner perspective. If executives see the function as becoming more strategic and influential, do practitioners agree? And two, what I’ll call the how perspective. Yes, we can measure if procurement is becoming more strategic and collaborative. But now let’s get into the methods and practices that procurement teams are using to make that vision a reality. So we looked at things like what KPIs are most widely used—and how much they’re actually valued. And we asked not just whether supplier collaboration is increasing, but about how supplier relationships are being defined, scoped and managed.
Q. What was the biggest surprise to come out of your research?
The practitioner perspective was an eye-opener. Unlike execs, the majority of practitioners don’t believe procurement is going to get more strategic. They think it’s going to maintain the current level of influence, shrink to only providing core services, or get completely absorbed into the rest of the organization.
If we are going to make the vision of procurement transformation a reality, executives may need to do a better job of communicating to their teams that their jobs are not only safe—but also that they’re going to become a whole lot more interesting.
Q. What was the most interesting finding about the future of B2B commerce?
Social networks empowered individuals and small businesses to collectively disrupt industries like publishing, music, and transportation. Now cloud-based business networks are going to level the playing field in B2B commerce. Several questions in our study validated that procurement executives and practitioners alike see business networks as a game changer for the function.
From a buyer’s perspective, all of a sudden you don’t have to be a mega-corporation to access the kind of tools that can dramatically increase your efficiency and visibility across the entire source-to-settle journey. And you may not have as much buying leverage, but you have instant access to a huge marketplace of sellers and can focus on strategic collaboration—which in turn drives competitive advantage. From a seller’s perspective, the network gives you more access to buyers and a better shot at being discovered for your unique story and ability to collaborate with partners in the right way at the right time.
Ultimately, when you bring more players to the game and level the B2B commerce field, the universal currency of business trade becomes innovation. It doesn’t matter if you’re the underdog. If you can innovate or connect with innovators, you win.