Last year proved that the purchasing landscape would never be the same. Businesses are increasingly turning to procurement teams to keep their organizations moving like never before. Through the challenges of 2020, we’ve seen inspiring examples of procurement teams that have worked tirelessly to support their employees, maintain business continuity, reimagine educational experiences, and advance racial equality.
Procurement leaders will play a critical role in business recovery and growth that will happen in the years to come. As we look ahead to the rest of 2021, what should be the focus for these teams?
Managing procurement imperatives
Diversity and inclusion initiatives are taking a more prominent role through many facets of business, including buying processes. In fact, 57% of procurement leaders report having a formal diversity program in place and 75% are planning an expansion of their programs. However, the majority (55%) of procurement leaders lack specific strategic sourcing requirements and almost half (40%) struggle to find qualified, diverse suppliers.
Additionally, supplier risk management is now a key focus for the majority (74%) of procurement leaders. Risk mitigation activities include testing supplier continuity plans, gathering more financial and operational data, and revisiting contract terms and conditions.
Mitigating supplier risks and expanding diversity-spending initiatives are just a few examples of procurement’s strategic objectives. Unfortunately, achieving these goals requires time that many procurement teams don’t have. Further, more than half (60%) of procurement leaders report greater cost savings goals this year compared to 2020. So as the old adage goes: how do we do more with less?
Gaining cost savings while achieving strategic priorities
Cost cutting and short-term reductions can impair your organization’s agility, compromise performance, and affect your strategic focus. To be successful, procurement leaders must have a holistic approach to reduce costs while maximizing business value.
One way to optimize costs is by deploying digital technologies that automate tactical work and generate insights from disparate data sources. This allows procurement leaders to:
These capabilities can help procurement leaders make better data-driven decisions, reduce manual activities, and reinvest time and resources in deeper, more value-add initiatives for the organization.