Two aspects of Procurement teams of the future or Procurement Centre of Excellence setups of the future are emerging clearly.
1.) They are extremely specific and not generic
Generic CoE setups end up as Reporting units. Your CoE resources will be busy churning our static dashboards, excel reports in pivots, and presentations for others. Lack of a specific niche or expertise is often substituted by Project management work.
Your CoE setup should have
a.) Spend Analysis Experts: Again, not BI or Data Visualization experts. I am talking about people who can understand the language of Procurement, can think about what data can be useful, figure out patterns and possible next steps, and apply the context before implementing them. (i.e. where the data is for negotiation, category management, tail spend, etc).
b.) Negotiation and Cost Modelling Experts: While I really love Negotiation tactics and firmly believe in the value one can derive using Tactical Negotiation techqniues, 80% of results come from how you prepare for Negotiation. Especially, when you are negotiating with your usual vendors i.e. the big strategic vendors, tactics alone won't take you far. This is where you need cost modelers in your team. You need to have someone passionate about keeping the cost model library updated and stress-testing its elements regularly. Should cost modeling be a good start but it needs to evolve to include Saas, Paas, Usgae-based, Index-based, and Perpetual license cost models to name a few!
c.) Outsourcing Experts: I think Procurement outsourcing will increase significantly in 2025 and years beyond. It is getting expensive to load resources with admin tasks involved in procurement and also indirect procurement. While the technology (ie. Agents) seems promising it will be a while before the unit economics can become favorable. For now, I'll count on someone, who would either do a DIY automation or outsource the admin activity.
The top 1% of setups are not looking to buy another shiny tool. They are sourcing for the top 1% of talent and reducing the number of intermediaries (i.e. generalistic project managers). This is such an exciting year to be in Procurement Excellence and I believe Spend Analysis, Negotiation and DIY automation capability is going to be the game changer!
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