In the last few years, Sourcing and Procurement, just like most of the other business functions has been immensely influenced and impacted by numerous internal and external factors like fast changes in technology, changing products and services, shorter business cycles, cost pressures, ever changing customer behaviors, and macroeconomic changes. All this has brought in quite a significant change in the procurement organizations like more investment in new procurement tools and technologies, frequent restructuring of the organizations (including downsizing and outsourcing), new skillsets, additional focus on governance, emergence of global / virtual teams, new suppliers, and new engagement models.
But most of these changes are ornamental when measured in terms of real value add to the business. The effectiveness of any procurement function is still governed by the four fundamentals - strategic sourcing, contract management, supplier management and order fulfillment. As long as the procurement organizations are doing these four things well, they are assured of good results. These results could be improvement in organizations' bottom-line or TCO (Total Cost of Ownership), supplier rationalization, better contract compliance, better supplier risk management, collaborative supplier relationships or better stakeholder management. The new technologies like Automation, Robotics, SMAC (Social Media-Mobility-Analytics-Cloud) are just the paraphernalia to the fundamentals. They are not the core or substitutes to the fundamentals. The success and effectiveness of procurement organizations is still governed by how well the fundamentals are performed.
This is where procurement leadership and talent have a key role to play. As long as a procurement organization has the competency to understand and deliver to the fundamentals, it shall contribute and play a vital role in any organization or business. But it's not as simple as it sounds. Somehow, in the flurry of fast evolving technological changes and other environmental distractions, the four fundamentals of procurement (which I call "commonsense procurement") have been relegated to the background. There is a lot more focus from a resources standpoint on the new "procurement gizmos" rather than demonstrating and executing "commonsense procurement". This has directly or indirectly led to mediocre output and dilution of procurement loci standi as a strategic corporate function.
Therefore, the question I have - why is it so difficult to focus and demonstrate "commonsense procurement" when the real value lies in it? Curious to get your thoughts and comments.