September 2018 |

Thoughts, Themes, and Poll Results

Transformation of the Procurement Function

Right from the first presentations we saw the importance of transformation for most of us in the room. As we listened to the very first session, we heard Chuck talking with Claudia and Tim about different, but no less important, transformations that they are running. From putting the basics into place, to running synergy programs, to collaborating more, we saw CPO’s driving functions at different stages of their evolution. But, they all had a common goal: to move their functions from one that primarily issues RFPs and negotiates with vendors into one that truly delivers business value.

Brian Chambers, CPO from Tate and Lyle, was able to share his views on Disruptive Transformation during the Proxima-sponsored Keynote. Brian shared a few definitions of ‘disruptive’ to kick off his presentation, and we noticed that, even if it wasn’t expressly stated, several other sessions also addressed disruption. Radical change, groundbreaking, and innovative were key phrases in the definitions, and looking at how Procurement is trying to change the shape of their organization, we agree that, as a function, Procurement is in a state of disruption. In a good way!

Procurement’s Relationship with the Greater Business

Following on the theme of Transformation (and disruption), there were a number of conversations and sessions around how the broader business views procurement, how to enable a successful, collaborative relationship, and especially the importance of Stakeholders, Finance, and Procurement working together with common purpose. Visibility of Procurement’s abilities, cultural (and stakeholder) influence, and negotiation abilities are important pieces of the puzzle.

Technology & the Future of Procurement

AI, Blockchain, Automation, and Digitalization…oh my. Technological advancements are happening in our companies, and for leading functions, in our departments. But are we ready? Do we need to be on the cutting edge, or is it more important now to be able to adjust when we need to? As Agility was the second lens of focus for the two-day event, we’d argue that being agile and having the foresight to build a function that can respond is the more pressing matter. Simon Geale, VP of Client Solutions from Proxima, delivered a presentation on Procurement 2025. The takeaway that really got people thinking (and elicited a few laughs in the audience) was:

  • 100% of tech companies believe that tech will wipe out procurement as we know it (and we must buy their products now)
  • 100% of consultancies believe there are complex global issues to tackle (and we should start working with them now)

Which is true? Is it both? Does it matter what’s actually true? We think the important step is building a function that tackles the global issues and is able to use technology intelligently, when it’s appropriate.

The Stats

Some of you may have participated in a short Procurement Challenges Snap Poll at the Proxima booth. Here are the results:

Question 1 asked if cost savings were a top priority for the organization. Unsurprisingly, 82% of respondents indicated that they were. We’ll dive into what the other priorities are in a follow-up piece.

Question 2 asked what percentage of spend organizations were able to manage. There was an even split between 21 – 40% and 41 – 60% at 35% of respondents for each. One person indicated that they were able to manage 81 – 100% of spend – certainly something to which the rest of our respondents aspire!

Question 3 asked if you have more (and more up to date) market insights than your stakeholders. “Some of the time” and “most of the time” were the most popular responses with 94%.

Question 4 asked about the biggest challenges in your organization. With over half of respondents indicating that their biggest challenge was that teams are overextended, it’s not surprising that only one person indicated that they could address 81 – 100% of spend. The team’s skill set was a challenge for 29%, and the relationship with stakeholders was challenging for 35%.

We also asked a few people to share thoughts on what, out of the questions listed, actually posed the biggest challenge, and one interesting answer was that “if you have challenges with the team, it’s hard to address the other pieces”.

We will explore that idea, as well as provide additional commentary on the poll, in a follow-up article!

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