There are dozens of improvement initiatives that procurement organizations could roll out to help catapult them into operational excellence from improving data and systems security to better measuring and managing value to that perennial favorite—reducing operating cost. But how can they choose which ones to prioritize?
The consulting company The Hackett Group, which specializes in procurement, has identified five capabilities that it sees as critical development areas for procurement organizations in its paper "2019 CPO Agenda: Building Next-Generation Capabilities." These improvement areas are based on the company's 2019 Key Issues Study, which involved surveying 150 executives at midsized and large (more than US$1 billion in revenue) enterprises in both the United States and abroad.
Authors Laura Gibbons and Christopher Sawchuk looked at what respondents said were the most important procurement capabilities for the year and compared them to how well the respondents said they were currently able to perform these capabilities. The areas with the biggest gaps between importance and ability were identified as "critical focus areas." These are:
The key to many of these initiatives will be a dual focus on implementing new digital technologies and training and developing employees.