CSCMP's Supply Chain Quarterly
December 15, 2017
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Procurement dreams big

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A new study from Hackett Group says that procurement executives want their organizations to focus less on cutting costs and more on being a strategic advisor.

Every year the research and consulting firm Hackett Group surveys large and medium-sized businesses to discover what key issues their procurement organizations are focusing on for the coming year. The recently released results for 2015 shows that while procurement organizations are still devoted to traditional goals, such as expanding the scope of their influence on spending and reducing their companies' overall purchase costs, they are also striving to play a more strategic role within the overall company.

According to the new report, titled Procurement's Key Priorities in 2015: Harnessing Big Data and Renewing Training Programs to Promote Enterprise Agility, 72 percent of the 170 survey respondents see the need to elevate procurement's role to that of strategic advisor to be a "critical" or "major" priority. In Hackett's view, being a trusted advisor would involve such capabilities as providing forward-looking market insights and serving as a "change agent." In addition to having a role in executive decision making, procurement organizations would also need to be perceived as "having a sincere interest in helping stakeholders achieve their business objectives," the report says. Hackett, however, argues that many procurement organizations do not have the necessary skills for fulfilling this role. While procurement organizations are capable of handling such initiatives as strategic sourcing and category management, in general they need to further develop capabilities like providing supply market intelligence, supplier relationship management, and data analysis and reporting, the researchers said.

Procurement organizations are responding to their need to evolve, however. Many are reinvesting in training and development programs that were cut during the last recession. One example is identifying high-potential employees and providing them with "stretch assignments" that will allow them to acquire new procurement-related skills.

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