Purchasing 4.0: The Future Of Buying

Ravindra Lalas, Head - Marketing, TCS Platform Solutions As the head of marketing, Ravindra is responsible for driving global marketing initiatives across TCS' business 4.0 platforms, including CHROMA(Talent 4.0), ERP on Cloud (Enterprise 4.0) and TAP (Procurement 4.0).

Aleader in sourcing or procurement function, as you transact through business as usual(and often unusual with disruptive times), matters that shape your days range from advancements in technology that solicit change programs, prospects of business growth that demand scalable and agile processes, managing and growing your team of experts, nurturing your supply ecosystem, while staying connected with professional communities for the latest developments. In essence you try to ensure reliable, safer responsible, sustainable and economic buying practices.

Like many break throughs that took place during difficult times, the advancement of sourcing and procurement profession into a sophisticated management discipline is often credited to the world wars. Over the decades the profession has shown great acumen in growing from a support function into a strategic organization making a third of any business enterprises’existence, with the other two being ‘value creation’ through core business and ‘value delivery’ to end customers. While the businesses have been going through dramatic transformation at all levels including business models, partner ecosystems, product lifecycles, access to markets, and customer engagement the sourcing and procurement discipline being lifeline of successful businesses is bound to transform in tandem. And as a result, you cannot stop to wonder, how might ‘future of buying’ look like?

However the question about the 'end-state'for you to be able to project the ‘future-of-buying’ is better explored deeper than a general sense of change being constant. For instance it is reasonable to assume that the economy of conducting business may not only supersede any other drivers of change but also help in laying down a transformation roadmap. However hidden underneath this notion of ‘economy’ are factors such as reliable partners responsible buyers safer and sustainable buying practices that matter in overall success. Let us look at a few aspects, related to such factors to be embraced and nurtured
as we step into the future of buying.

From Do IT Yourself (DIY)to Manage IT Yourself (MIY)
Those engaged in day to day purchasing activities would require self-service ability at a greater degree that is not only limited to providing ‘Do It Yourself(DIY)’, but is also prescriptive in nature in recommending best or optimum options to the users. It can also be termed as intelligent empowerment for the users to operate in an environment that while allowing users to go about day to day purchasing independently, is able to contextualize user needs by raising flags by way of recommendations or even warnings. For instance if a user is ordering a specialized software without ensuring that the users personal computer has adequate hardware and computing resources to run the software optimally, then it is for the system to raise a flag, and potentially trigger a hardware upgrade at the same time, ensuring a ‘first time right’ order, while saving organizations precious resources spent in rework and longer wait times.

As the businesses scale, they do away with dependencies on individuals and rely more on robust processes and systems

Dividing The Risk and Rewarding Trust
As the businesses scale, they do away with dependencies on individuals and rely more on robust processes and systems. In the context of sourcing and procurement this would imply that cumbersome arrangements with individual suppliers are replaced with cloud enabled market places. Businesses would be more than eager to experiment if the items being sourced are not related to their core business. In doing so businesses would be able to transfer good part of risk to the market place, as the market places start to play greater role in supplier on-boarding, performance and risk aspects. A healthy competition with greater transparency would motivate suppliers to perform and grow. Lower entry barrier would allow greater participation and even innovation in the way products and services are offered. Take for example companies allowing employees to use app based cab services(linked to a separate business account)for business related travels or say a large furniture business tying up with an app based utility service provider to take care of on-site assembly and installations.

With ‘Manage It Yourself(MIY)’empowering users, and non-core supplies democratized through market places the future of buying will be about striking a right balance between risk and rewards as cloud technology and ecosystems(such as blockchain) allow businesses to operate with greater freedom & flexibility, while intelligent technologies ensure greater compliance. Sourcing and procurement office of the future would be able to work more closely with business in exploring new markets. This office would also be engaged in analyzing usage and users, spotting outliers and exceptions, and nurturing business rules(driven through intelligent automation) to encourage responsible buying practices. With the ‘new age’ of buying bringing the office much closer to the business, it would also be able to look at the relations with suppliers, concerning their core business, with greater focus driving supplier performance, risk and innovation with greater agility. From the technology stand-point it also means mass API fication implying an ability to decouple and unbundle software applications and utilities, turning the sourcing and procurement technologies into a highly democratized world of apps that can be deployed with as little as ‘plug & play’ effort seamlessly orchestrating the next generation sourcing and procurement processes. Welcome to the future of buying!