The following are the key areas where procurement is able to take on a more strategic role and enhance the value it delivers:
- Partnering with the organisation: To achieve a place at the boardroom table and become a true strategic partner, procurement must do more work to align to key stakeholders and understand the business operations.
- Moving beyond cost savings: Squeezing costs from supply contracts will always be a central part of procurement. However, many organisations are struggling to extend their activities into core capabilities such as category management, and beyond into demand management, supplier relationship management (SRM), and risk management.
- Achieving the optimal operating model: While most procurement organisations have already adopted a more centralised operating model, many still face challenges in translating this into strategic value for their businesses.
- Prioritising supply chain risk: The research shows worrying lack of leadership in the area of supplier risk. Procurement will need to aggressively push the inclusion of supply chain risk on the broader business agenda, in order to protect the business from the uncertain and turbulent economic environment.
- Leveraging systems and technology: While supply chain technology and business systems have evolved rapidly, many procurement functions seem unable - possibly unwilling - to leverage these new capabilities in order to bring greater automation to their business.
Procurement professionals have a significant opportunity to enhance the value they deliver, and consequently the competitive advantage of their organisations. However, it is up to CPOs and Supply Chain Directors to make the most of this opportunity.