The future(s) of procurement

By Oliver Knapp, Apratim Sarkar, Marcus Schüller and Hannah Zühlke

Our new study tackles perhaps the most important question facing chief procurement officers and other purchasing professionals today: How do you plan for a future that seems to be growing more and more uncertain?

Two factors – the speed and trajectory of technological advances and the stability (or otherwise) of geopolitical matters – are singled out as critical in shaping how procurement will develop in the years ahead. But even just these two factors could combine in a variety of permutations – with widely differing outcomes and implications.

The new publication condenses these possibilities into four key scenarios, each of which describes a different future with a significantly different impact on procurement practices and strategies.

The global context of each of these four scenarios is analyzed in detail, followed by a discussion of the projected impact on both supply chain issues and demand through the lens of procurement professionals.

• “Caught in the comfort zone” envisages a world with stable geopolitics but only slow steps forward in technological development.
• “The land of milk and honey” is likewise stable geopolitically but also experiences rapid and major advances in key technologies.
• “Stagnation in a volatile world” sees turbulence in the geopolitical arena and few breakthroughs in technology.
• “The technology race” combines similar geopolitical turbulence with a much brighter technological picture.

What the professionals say

To validate these projected scenarios, established procurement leaders were asked to assess and give their verdict on each one. Specifically, the procurement experts stated which of the variations they would prefer to see unfold, but also which one they felt was most likely to occur in reality. The potential impact on economic prosperity, global collaboration, technological advances, and the way businesses conduct their procurement activities was then discussed in detail.

Not surprisingly, “The land of milk and honey” was the scenario chief procurement officers would like to see take shape, with technology racing ahead and creating fresh opportunities in a stable geopolitical environment. More soberingly, however, the majority did not see this as the most likely outcome going forward. Instead, they anticipate a reality approaching the “Technology race” scenario, where advances in technology largely have to be channeled into developing resilience in a geopolitically unstable world.

In-depth discussion of the perceived risks and opportunities inherent in each scenario nevertheless highlights one crucial point: None of the scenarios can, in the view of the procurement leaders surveyed, be ruled out completely. While preferences and real-world expectations are clear, and while opportunities exist in each scenario, this finding underscores the fundamental premise of the new study: The future is uncertain, so preparations must be made even for outcomes that are perhaps considered unlikely.

Tracking the Opportunity Radar

In the face of such uncertain developments, the study closes with a series of practical recommendations to help procurement managers optimize their positioning no matter what future transpires. Precisely because of the level of uncertainty, we have also taken a deep dive into the very broad spread of opportunities that exist in many relevant areas – and that procurement professionals are strongly urged to keep in view. Separate from the main study, this Opportunity Radar systematically documents an array of factors where future developments, unknown today, could materially impact procurement practices and strategies in the future.

Register now to access the full study. Furthermore, you get regular news and updates directly in your inbox.