Markit clients confirm that they save a considerable amount of time (compared to their previous solution for buying IT equipment) and so, indirectly, Markit is enabling CPOs and their teams to spend less time on transactional tasks and more time on urgent or strategic issues including identifying new sources of value within the procurement function, as a whole.
Business Role: Shift from “Procurement’s Client” to Disciplined Sourcing Agent
The business will gain more responsibility over its sourcing decisions and own more of the consequences of irresponsible/maverick sourcing, as well as more of the partnership activity with suppliers. This extends in the case of IT devices down to end users being able to purchase their own requirements from pre-approved product lists from marketplaces/suppliers. Procurement will enhance its training and coaching capabilities to help ease the transition to business partners sourcing IT devices on their own.
Simplicity and transparency are key issues here. It’s worth noting that 69% of business users prefer a system that’s easy to use as opposed to 31% who prefer to understand the value of the system. Source: Procurement Business Partners Sourcing Effectiveness Survey
Markit recognises the CPO’s challenges here and facilitates this through personalised onboarding of their company's “authorised buyers”. At the same time, we provide the procurement function with mechanisms and full transparency of pricing & purchase history to evaluate and monitor IT device sourcing and spend discipline by the business. In the case of IT hardware and accessory procurement we also see a trend towards supplier consolidation, customised IT catalogues and punchout integration to facilitate procurement’s goal to create, and manage, disciplined IT sourcing agents within their companies.
Procurement process expertise and category management skills will become more valued as the procurement function moves away from purely transactional tasks and sourcing expertise. In the case of IT procurement for example, we see (in the larger companies) CIOs and CTOs making more of the sourcing (product and supplier) decisions whilst CPOs focus on process, insight gathering and business-buyer management. Of course, where the business has limited or insufficient IT buying expertise the procurement function takes back (or never releases) the transactional tasks. This illustrates the need for simplicity in whichever IT device procurement system is used.