Four improvements procurement must achieve in 2018

The Hackett Group’s 2018 CPO Agenda report identified four key improvement areas for those holding procurement roles. They are:

1. Aligning procurement skills with evolving business needs

This is seen by 77% of respondents in the 2018 report as of “high” or “critical importance”. To address this, leading procurement staff are seeking new talent/skill areas and assessing the merits of adding non-traditional, insight-led expertise to their organisations, such as data scientists and physicists.

2. Managing and measuring procurement performance and business value

A similar proportion (76%) rated this as “high” or “critical” in importance. Mature procurement organisations look further than standard tactical supply and assurance issues toward strategic business enablement, but this necessitates greater coordination and joint work with suppliers and internal stakeholders. Procurement jobs in this area require people who possess advanced business skills such as negotiation, relationship management, strategic thinking and innovative problem-solving aptitudes. Increasingly, procurement professionals will need to include in their suite of skills protecting revenue and brand integrity by avoiding profit impacts on top of their conventional purchase-price reduction capabilities.

3. Using supplier relationship management (SRM) to leverage greater value from existing suppliers

To strengthen SRM abilities among procurement professionals, growing numbers of organisations are transferring SRM activities, as well as supplier onboarding and performance management, to a Centre of Excellence (or equivalent) to get maximum use out of these scarce skills. Another initiative is piloting joint customer/supplier activities to encourage the latter to invest in technologies and share ideas with customers. This improves when collaborative relationships between the two are fostered.

4. Using category management to leverage greater value from existing categories

Category management helps procurement pros manage entire spend life-cycles, not simply one-time events. 83% consider improving category management to be of high/critical importance but the requisite skills remain relatively sparse. Growing numbers of organisations are seeking to get the most out of them by migrating analytics to a category management Centre of Excellence for delivering holistic evaluation of contract and supplier lifecycles.

To apply for your next Procurement Interim position click here