Source: SupplyChainDigitial

Partners from McKinsey & Company delve into how procurement is evolving thanks to factors including technology advancement and ESG integration.

McKinsey & Company is among those leading the discussion on how procurement can become a strategic business driver, exploring how the function is influencing corporate decision-making, leveraging technology and integrating sustainability into supply chains.

The firm contends that procurement is no longer a back-office function focused solely on cost reduction; instead, it has become a critical component of business strategy, helping organization’s manage risk, drive innovation and build resilience.

Roman Belotserkovskiy, Partner at McKinsey, highlights: “In many cases, procurement leaders have been elevated to a position of influence and are able to drive a lot more impact for their organization’s. The expectations have risen significantly. And that means we need to reimagine procurement.”

Jennifer Spaulding Schmidt, a Senior Partner, explains: “Right now what we’re seeing is that procurement is involved very early on, scoping and shaping the demands of the business, and then helping find the partners that the business needs: short-term partners and long-term partners. “Over the next ten years, I think that’s only going to become a more central part of how executive teams work and function.”

Fellow Partner Samir Khushalani mirrors this message, stating: “Digital is the unlock for the next horizon of procurement excellence. It would be easy if there was one single app or tool that could be all things to all categories to all stakeholders. But there isn’t. Leading procurement functions are starting to invest in an ecosystem of a digital procurement engine.”