The way businesses buy the essential services they need is changing rapidly.
In the old world the way a company worked with suppliers was likely a long-term relationship lasting for years.
There was probably an annual review period during which both sides engaged in a bit of gentle tweaking, haggling and golfing before signing up for another twelve months.
Any change of supplier was a massive undertaking violently resisted by many staff because ‘that’s the way we’ve always done it’.
But today services are increasingly delivered digitally and via some sort of hybrid infrastructure so there is far more flexibility on both sides.
Cost pressure means businesses will be looking for incremental savings from all their business services and the days of relying on one or two technology providers are over.
If a cloud provider offers a better deal, and the technology is in place to allow a seamless move, then it is becoming ever easier for the customer to move.
Changing your off-site storage provider is not yet as simple as touching a button but it is fast moving that way.
These technology changes will likely change the size of future contracts too.
Individual departments, and even teams within those departments, will be making those decisions themselves.
Future procurement is likely to be done for individual projects, because the costs of arranging a competitive bidding process will be greatly reduced.
Lower procurement costs and increasing interoperability are further reducing the rationale for the IT department to keep a choke-hold on purchasing decisions.
They way that business purchasing decisions are made is also changing.
Business procurement in the future will look just like personal online shopping does today.
If you want a new laptop or a camera the chances are you go online and look at reviews – both from professionals and from happy, and unhappy, customers. You’ll have a quick trawl through technical support forums to check there aren’t dozens of people waiting for help with the same problem.
You might start by looking at brands that you favour but you’re unlikely to be terribly loyal to any particular badge.
Next you’ll decide on the set of features you need, and some models which provide those features.
Then you look for the provider with the lowest price. On Amazon, eBay and most other shopping sites this is a simple click of the button – ‘low to high’.
Of course you will consider other factors – the cheapest price item often shiips from China which means a long wait and expensive returns if your camera doesn’t work.
This might encourage you to choose a supplier nearer home – but the difference in cost will remain very near the front of your mind.
The days of walking into a shop and seeing what the salesperson could offer you are all but over.
Business procurement is going to go the same way.
Staff needing a provider now talk to their peers at other companies – either directly or via social media platforms. They do their research online long before they approach a provider or a reseller.
The people making buying decisions in five years time won’t have ever bought anything without researching it online first – so they’re going to do the same when buying at work.
In five years time business procurement will look very different – but it will look extremely familiar to anyone who’s ever done any shopping online.