Amit Sharma, who leads Procurement Outsourcing at Aditya Birla Minacs, is a keynote speaker at the Abuja ProcureLive Conference 2011 during December 2-3. He will be speaking on and discussing several plenary topics like: Procurement's Functional Evolution and Vision 2020; Holistic Approach to Procurement Transformation; and Demystifying the Procurement Outsourcing Value Proposition. We caught up with him for a chat on the eve of his departure.

A. The economic events of the last few years have led to a clear shift in business priorities. The need for organizations to globalize while focusing on entering new markets and launching new “localized, global” products remains such a priority. Business leaders, however, cannot lose sight of the basics– operational efficiencies and bottom lines!

A. Over the last decade, the function has evolved tremendously. "Procurement" has replaced "Purchasing". Ten years ago, even top purchasing departments processed purchase orders. Today, procurement departments centralize the supplier selection process, not the transactions, which are delegated to end users, or outsourced.

Surely, given the market dynamics alluded to earlier, there is even more reason to look more closely at the “why’s and how’s” behind what organizations do in their procurement processes. The need to transformprocurement processes is being driven by the value that it can bring to the enterprise!

A. In the here and now, the focus has to be on transforming the function for the future. I recommend a three step approach for CPOs:

• Plan and Assess: Determine where the function is at currently – identify gaps in the process, systems and policies. Also assess the team’s skill levels and capabilities.
• Analysis & Design: Benchmark the current procurement spend, processes, technology and policies for effectiveness. Design and define the transformation roadmap.
• Develop & Execute: Develop detailed actionable charters of improvement initiatives spanning the organization, processes, technology, people and change management initiatives. Also develop a business case for initiating the “transformation” to capture where you want to go with it.

When coursing through the above three steps, it is important that CPOs envision and define what best-in-class procurement is and what it needs to deliver to the business in the long-term. I will be going into this in more detail at one of talks at the conference.

A. I believe, in the next ten years, while the procurement function will have to continue focus on shoring up the bottom line, newer demands will also need to be met. Embedding sustainability into the process and using predictive analytics will be a key strategy.

Similarly, procurement outsourcing providers will have to be innovative and invest more skin into relationships. The traditional lift-and-shift outsourcing model will be replaced with more end-to-end solutions owned by the service providers, integrated with technology, and often delivered witha "cost plus gain share" approach.

I believe too thattechnology (cloud computing and social media), investments in analytics, defining metrics of measurement, and creating centers of excellence à la "Financial Supply Chain (FSC) Excellence Center", will be powerful enablers for creating the new procurement organization of the future!