Key Issues Study: "Borderless Business Environment" Driving New Pressure,
Changing Priorities for Procurement Leaders
Budgets, Staff Remain Flat as Procurement Leaders
Search for Ways to Support Profitable Growth;
Category Management, SRM, and Supply Market Intelligence All Seen as Key
MIAMI & LONDON -- April 04, 2013
Procurement leaders face new pressures in 2013 as companies focus on
profitable growth and balance local agility with global scale in their value
chains, according to new Procurement Key Issues Research from The Hackett
Group, Inc. (NASDAQ: HCKT).
While company revenue continues to grow, procurement leaders along with other
business functions continue to be asked to do more with less. In addition,
it's no longer enough to just provide spend cost savings. Procurement leaders
are now focusing on a much broader list of procurement strategy priorities
designed to improve their alignment with business objectives. Areas such as
accelerating revenue growth, enhancing operational agility, and improving
customer service and satisfaction are becoming much more important to
Procurement leaders than ever before.
"To augment spend cost reduction efforts, procurement organizations are
striving to expand their focus to enable product and service innovation and
ultimately growth. To accomplish this, procurement organizations are
transforming from business process executers to business process enablers.
They are transitioning from episodic sourcing to a life cycle-based category
management approach while broadening supplier relationship management
capabilities and offering deeper supply market intelligence to the business, "
said The Hackett Group's Global Procurement Advisory Practice Leader and
Principal Chris Sawchuk.
"For 2013, company leaders are seeking the agility to help them achieve profit
targets even if revenue falls short of expectations," said Mr. Sawchuk. "One
key to this is for procurement and other business services to add value
without increasing budget or headcount. They are also asking that business
services become truly borderless, from geographic, organizational, technology,
and process standpoints. Standardization and globalization are critical, so
that business services can create value by working across functions, business
units, and geographic borders. And finally, procurement and other business
services need to drive greater insights and intelligence from the wealth of
data at their disposal."
The Hackett Group's study found that procurement leaders expect their budgets
to decline by 0.4 percent in 2013. Procurement staff is also expected to
shrink slightly, by 0.5 percent. At the same time, annual revenue growth of
6.5 percent is expected.
Reducing spend costs remains at the top of performance-related concerns in The
Hackett Group's study. But innovation has shot up in the rankings, and is now
tied with spend influence as the number two priority. Managing supply risk has
increased significantly in priority as a means of profit protection, with
supplier compliance receiving particular attention. The emphasis here is on
efficient management of cross-functional workflows relating to regulatory
requirements and supplier compliance with performance expectations. To
accomplish this, companies are focusing on a combination of process
improvement, master data management, analytics, measurement systems and more.
The Hackett Group's research also recommends that as companies move from
episodic sourcing activity to a life cycle-based category management approach,
new capabilities must be built, including broader supplier relationship
management (SRM), deeper supplier/market intelligence (and associated
analytics), and the way in which these knowledge-based processes can be
delivered as services in a scalable way. The goal should be to set up a
“one-to-many” approach through a Center of Excellence serving both procurement
and its stakeholders.
More details on The Hackett Group's research is contained in the full
Procurement Key Issues Research Insight, which is available at no cost
(registration required) at
About The Hackett Group
The Hackett Group (NASDAQ: HCKT), a global strategic business advisory and
operations improvement consulting firm, is a leader in best practice advisory,
business benchmarking, and transformation consulting services including
strategy and operations, working capital management, and globalization advice.
Utilizing best practices and implementation insights from more than 7,500
benchmarking studies, executives use The Hackett Group's empirically-based
approach to quickly define and implement initiatives that enable world-class
performance. Through its REL group, The Hackett Group offers working capital
solutions focused on delivering significant cash flow improvements. Through
its Archstone Consulting group, The Hackett Group offers Strategy & Operations
consulting services in the Consumer and Industrial Products, Pharmaceutical,
Manufacturing, and Financial Services industry sectors. Through its Hackett
Technology Solutions group, The Hackett Group offers business application
consulting services that help maximize returns on IT investments. The Hackett
Group has completed benchmark studies with over 2,800 major corporations and
government agencies, including 97% of the Dow Jones Industrials, 86% of the
Fortune 100, 90% of the DAX 30 and 48% of the FTSE 100.
More information on The Hackett Group is available: by phone at (770)
225-7300; by e-mail at email@example.com.
The Hackett Group
Gary Baker, 917-796-2391
Global Communications Director
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