Hackett Group produces fresh insights on procurement trends

Procurement leaders face new pressures in 2013 as companies focus on profitable growth and balance local agility with global scale in their value chains, according to new Procurement Key Issues Research from The Hackett Group, Inc.

While company revenue continues to grow, procurement leaders along with other business functions continue to be asked to do more with less.  

In addition, it’s no longer enough to just provide spend cost savings. Procurement leaders are now focusing on a much broader list of procurement strategy priorities designed to improve their alignment with business objectives.

In an interview the LM,  The Hackett Group’s Global Procurement Advisory Practice Leader and Principal Chris Sawchuk said that the “talent pool” is problematic.

“Finding the right young professionals for procurement functions is a challenge, but retaining them can be an even bigger problem…especially if they are not being used strategically.”

Areas such as accelerating revenue growth, enhancing operational agility, and improving customer service and satisfaction are becoming much more important to procurement leaders than ever before.

“To augment spend cost reduction efforts, procurement organizations are striving to expand their focus to enable product and service innovation and ultimately growth,” said Sawchuk.

To accomplish this, procurement organizations are transforming from business process executers to business process enablers, added Sawchuk.

“They are transitioning from episodic sourcing to a life cycle-based category management approach while broadening supplier relationship management capabilities and offering deeper supply market intelligence to the business,” he said.

For 2013, company leaders are seeking the agility to help them achieve profit targets even if revenue falls short of expectations, Sawchuk noted.

“One key to this is for procurement and other business services to add value without increasing budget or headcount,” he said.

Sawchuk observed that they are also asking that business services become truly “borderless,” from geographic, organizational, technology, and process standpoints.

“Standardization and globalization are critical, so that business services can create value by working across functions, business units, and geographic borders,” he said. “And finally, procurement and other business services need to drive greater insights and intelligence from the wealth of data at their disposal.”