Procurement’s evolutionary journey can be traced back to the Industrial Revolution and America’s Gilded Age, when manufacturing surges required a large-scale approach to securing supplies. Before World War I, procurement was primarily clerical. Two World Wars formalized procurement through the challenges and importance of securing raw materials. From the 1950s through the 1980s, procurement strategy began to emerge along with new approaches to managing third-party relationships.
In the 1990s, procurement’s focus shifted from securing supplies to delivering savings and cost containment. This internal elevation took place against the backdrop of the earliest investments in procurement-specific technology: the development of supply management software solutions that helped automate the source-to-settle process. The global recession of 2008-2009 required CPOs to address compliance, mergers and acquisitions, supply chain risk management, environmental responsibility, and sophisticated cost efficiency.
Today, procurement serves as a critical link between enterprise decision makers and strategic suppliers as market unpredictability, cutthroat competition, complex regulations, and geopolitical pressures continue to challenge leadership.
It has taken over a century for procurement to evolve from tactical to strategic, but the pace of change — and the magnitude of what’s at stake — are both about to increase. Procurement must align its objectives with those of the organization as a whole if it wants to leverage the full advantages of digital business. Only then can procurement achieve the much-desired position of trusted advisory partner.
This book looks at digital transformation in the context of procurement’s evolution as well as the growing complexity and opportunities associated with today’s extended global operations.