The Procurement Anti-Trends for 2018, so the procurement practices to avoid

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From the beginning of the new year most of the companies are searching for new trends in procurement. What will change and what will stay the same? Having read a bunch of the articles on the topic, we have decided to pick the trends which have a negative impact both on the processes, methodology as well as costs and supplier management.

Spis treści

1 Procurement area differs from fashion – the trends do not change every season. Cost optimization, effective innovations, improving processes and managing supplier development strategy are priorities for Procurement Managers and Logistics Specialists. We definitely should mention that recently we have been experiencing a turning point in procurement. If we want to prepare our company for the next procurement level, we need to learn from the pioneers. And avoid some practices. Here is our ranking of the ati-trends:
2 Anti – trend no. 1. I have talented employees onboard, but… I’m not investing in them.
3 Hackett Group research shows extremely interesting correlation between managing talents and company income. The top-performing talent management organizations have 15% higher income than peer companies Most of the managers working in innovative organizations realize that the employees are the future of the company. In practice, talent management strategies are not implemented at all or they are implemented wrongly. Moreover, there is the question how to manage talents effectively. Most importantly, companies’ challenge is not only talent identification, but also preparing development programs for the employees. Investing in trainings and employee education increases their effectiveness and company earnings. Not to forget about the factors such as generational change, cultural differences, social media influence, especially in case of Millennials (read more on the Millennials in procurement here ).
4 Anti-trend no 2. AI is going to replace people
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6 If we have to choose most important technological trends which have been influencing procurement recently, we would definitely list: AI, big data, cloud computing. While cloud computing has become a standard right now, and big data is more often a basis for analyses and choosing best offer, AI still causes concern and it is very often wrongly interpreted. It seems to be a bit terrifying for some, meanwhile in excellent organizations the innovations support decisions, for example Business Intelligence systems (BI). Currently, every business model is based on analyses and big data synthesis, both from company internal and external sources. Nowadays the question is not whether we should implement new technologies, but how to do it.
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8 Anti-trend no 3. At the lowest possible cost
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10 Although cost optimization is one of the most critical matters for organizations, sometimes is wrongly understood. Although spend reduction may influence on invests, but also, if the cost cutting process is not conducted in the right way, it may increase the risk of failure. The example is buying cheaper components in a manufacturing company, what can result in deterioration in end product quality and eventually decreasing sales revenue. The real cost optimization results in significant savings, keeping product high quality, according to the organization internal standards. Sourcing best suppliers may be supported by the platforms such as NextBuy, where among other functionalities, the is non-price aspect criteria option as well as attaching significance functionality.
11 Translated by: Katarzyna Nitychoruk-Brzeska.

Procurement area differs from fashion – the trends do not change every season. Cost optimization, effective innovations, improving processes and managing supplier development strategy are priorities for Procurement Managers and Logistics Specialists. We definitely should mention that recently we have been experiencing a turning point in procurement. If we want to prepare our company for the next procurement level, we need to learn from the pioneers. And avoid some practices. Here is our ranking of the ati-trends:

Anti – trend no. 1. I have talented employees onboard, but… I’m not investing in them.

Hackett Group research shows extremely interesting correlation between managing talents and company income. The top-performing talent management organizations have 15% higher income than peer companies Most of the managers working in innovative organizations realize that the employees are the future of the company. In practice, talent management strategies are not implemented at all or they are implemented wrongly. Moreover, there is the question how to manage talents effectively. Most importantly, companies’ challenge is not only talent identification, but also preparing development programs for the employees. Investing in trainings and employee education increases their effectiveness and company earnings. Not to forget about the factors such as generational change, cultural differences, social media influence, especially in case of Millennials (read more on the Millennials in procurement here ).

Anti-trend no 2. AI is going to replace people

If we have to choose most important technological trends which have been influencing procurement recently, we would definitely list: AI, big data, cloud computing. While cloud computing has become a standard right now, and big data is more often a basis for analyses and choosing best offer, AI still causes concern and it is very often wrongly interpreted. It seems to be a bit terrifying for some, meanwhile in excellent organizations the innovations support decisions, for example Business Intelligence systems (BI). Currently, every business model is based on analyses and big data synthesis, both from company internal and external sources. Nowadays the question is not whether we should implement new technologies, but how to do it.

Anti-trend no 3. At the lowest possible cost

Although cost optimization is one of the most critical matters for organizations, sometimes is wrongly understood. Although spend reduction may influence on invests, but also, if the cost cutting process is not conducted in the right way, it may increase the risk of failure. The example is buying cheaper components in a manufacturing company, what can result in deterioration in end product quality and eventually decreasing sales revenue. The real cost optimization results in significant savings, keeping product high quality, according to the organization internal standards. Sourcing best suppliers may be supported by the platforms such as NextBuy, where among other functionalities, the is non-price aspect criteria option as well as attaching significance functionality.