What are the key operational challenges currently facing UK companies’ procurement processes? Is procurement becoming more strategic, in the same way that sales, marketing, HR and other functions have? And how do procurement professionals expect their role to evolve in the future?
Across many organisations in a variety of industries, procurement is changing. Simple project-based transactions, as a back office operation, may have been sufficient in the past. However, fuelled by technology, procurement is moving into the operational spotlight. Supplier networks are available via online platforms, for identifying and comparing strengths and weaknesses. Price changes can be instantly analysed using software, for developing purchasing strategies. And the advent of big data has enabled deeper insight into behavioural trends.
We reached out to over 1,500 leaders in procurement and finance. Their insight, experience and informed answers are contained within the findings below. On behalf of Chief Nation and SAP Ariba, we thank them for their input, and hope you find the information useful and thought-provoking.
1. How do you view the role of procurement in your organisation?
It’s clear the procurement role is changing to become more strategic. This question aimed to gauge the mood amongst procurement professionals.
Around three-quarters of respondents view the role as either very or moderately strategic. This is positive to see. After all, a correctly executed procurement strategy offers many benefits, including cost-effectiveness, better decision-making and improved supply chain management.
2. What percentage of your current indirect spend is under
management and compliant with internal controls and policies?
To uncover the nature of organisations’ procurement at the “back end” of operations.
This area of procurement is often regarded as more strategic, compared to the tactical approach regularly seen in direct buying (for example, responding to a price change). Almost one-third went for the “80%–100%” option. Overall, almost two-thirds opted for answers between 40% and 100%.
3. How likely is your organisation to invest in procurement
solutions over the next 12 months?
As technology becomes more ingrained in procurement, what will be the resulting pace of change?
Procurement looks to be a focus for many organisations who are looking to improve upon their current systems. Indeed, 49% of the represented enterprises are likely or highly likely to invest in procurement solutions within the next year.
4. What are your predictions for the following procurement
trends over the next 12 months?
To get direct insight from procurement professionals into how they see procurement’s future direction.
Respondents forecast increased change in several major areas, with technology and innovation at the forefront. It is highly likely that the increase in new procurement technologies predicted by 77% of participants will, in part, serve to cater for increased smart-device usage and mobility.
5. Please rate the following in terms of your priorities, for
procurement in your organisation, over the next 12 months.
This question wanted to go beyond top-level strategy, and see what other procurement priorities are on the radar for organisations.
Respondents’ primary focus appears to be on suppliers. Namely, managing relationships and risk. The other main priority is gaining visibility of spend. There’s also high interest in harnessing technological tools.
6. What are your top 3 priorities from a procurement solution?
Procurement solutions offer a variety of advantages. Which ones are seen as most important by the end-users? Respondants were asked to select two answers.
It’s of particular interest to see high demand for “effective analytics and data insight”. Across industries, organisations are working out how best to take advantage of data and tools such as predictive analytics. Procurement solution providers must recognise this, and offer the right balance of effectiveness and usability in their products.