Last year, procurement teams made drastic shifts in purchasing and supply chains to quickly respond to pandemic-related disruption. These unexpected changes impacted leaders across the enterprise. Everyone from CIOs seeking new technology to support remote work environments to CFOs reallocating cash flow to address the pressing needs of their employees and customers, had to adjust.
Increasingly, the C-suite is turning to enterprise procurement leaders to lead them through evolving purchasing needs and generate more business value for the organization. However, the pandemic has exposed risks in procurement’s resiliency. Many leaders are questioning: how can our team be better equipped to meet today’s evolving sourcing needs to accommodate hybrid work environments while positioning ourselves to meet the demands of tomorrow?
Opportunities for enterprise procurement leaders
Buying behavior, supply chains, and sourcing demands will continue to evolve. Here are three key opportunities for procurement leaders as they reevaluate their operations and build a new foundation for the years ahead.
1. Focus on tomorrow
Procurement teams face balancing short-term crisis-response needs, like maintaining personal protective equipment and managing a decentralized workforce, with long-term strategic objectives. While it’s uncertain when the pandemic will subside, the majority of CPOs believe that the period of rapid response to maintain supply continuity has passed (or will end soon). They are shifting their supply chain to focus on recovering and thriving in the next normal.
Now is the time for procurement teams to embrace a centralized approach to strategic sourcing that mitigates risks, enhances their purchasing power, and aligns priorities with board-level objectives. By leveraging a unified solution that addresses enterprise-wide sourcing needs, procurement leaders will achieve their goals with greater ease, while enhancing their ability to respond to sudden supply challenges in the future.
2. Optimize (don’t cut) resources
Today’s buyers are more hesitant to spend. In response, many companies have reacted by cutting costs. However, reducing spending can inadvertently compromise product and service quality as well as morale.
If cost reduction alone, isn’t the answer, then what is? One way is to simplify your supplier strategy, automate tasks, and gain a holistic view of buying behavior by employing innovative technology. New tech solutions empower companies to make better budgeting and purchasing decisions and reduce time wasted on administrative activities.
3. Accelerate sourcing
Traditional sourcing tactics, with their notoriously slow processes, tend to bog down company-wide operations and frustrate business partners. Procurement leaders are under pressure to improve sourcing speed and executives report sourcing speed/cycle times as a key metric when assessing the value of procurement. Can enterprise leaders afford to compromise on supply speed when time and critical resources are in high demand?
Rapid sourcing comes with significant business benefits, but without the right solutions and processes it can also introduce risks. By using sourcing solutions with artificial intelligence and machine learning capabilities, procurement teams can:
These efficiencies have the potential to accelerate purchasing, increase stakeholder satisfaction, and mitigate risks.
Refining what's possible for procurement
The C-suite is demanding greater growth, faster innovation, and leaner budgets to combat the effects from the past year and improve organizational performance. Procurement teams will need to transform from a support role into a strategic driver for the enterprise. So how can procurement leaders gain the agility to execute towards these goals, reshape how they buy, and refine what’s possible for their team?
In our playbook, we detail answers to these questions and offer more advice to procurement leaders to become engines for growth to drive their businesses.
Download "The Enterprise Procurement Playbook" to learn tactics and approaches to prepare for the year ahead, accelerate growth, and meet new strategic challenges.
Download the playbook to learn more or connect with a customer adviser to get started.
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