Q: What are the key trends you are seeing in procurement this year?
A: For many procurement departments this year, there is a continuing shift as to how procurement is seen by the rest of the business. After years of talk of the strategic potential of procurement, it is now becoming more of a reality, and is more akin to business. There are more board positions becoming available for procurement, and more strategic, forward-thinking businesses who see the greater value of procurement.
Q: What are the biggest struggles facing procurement today?
A: There is still a big misconception about what procurement does – cost savings is ultimately a small part of the bigger procurement picture, and the wider business needs to be educated on this. The best way to do this is to make results tangible to the business – demonstrate “real” savings through a methodology and tools that are auditable and accountable. At the moment, many procurement departments are flying blind without the tools to slice-and-dice data and have a truly accurate and accountable process.
Q: Some say many procurement departments are behind the curve when it comes to analytics. Do you think that is true?
A: Procurement is behind the curve in terms of how it does analytics, and the divide is especially pronounced when you divide those over and under $1bn in revenue. Those over $1bn have spend analytics, but there is a big reliance on big access databases, which need a lot of manual intervention. Those smaller companies, whilst using technologies such as SharePoint, conversely, still have the problems of labour-intensive and manual solutions. Ultimately, procurement needs to bring its data together, out of ERP systems to be able to get a single, holistic (and ideally cleansed) view of data. This means that procurement and finance can then focus on the value-add of spend analytics, rather on trying to wrangle data.
Q: How can procurement become more tech savvy?
A: Procurement traditionally prefers “safe” options, and the technology decisions are usually mandated from the C-suite. The key really is for tech vendors to truly understand what makes procurement tick, and that there is no “one size fits all” solution. Traditionally, cloud has seen roadblocks in procurement departments, largely because of its very nature – it is intangible, so it can be hard to enable new users to fully understand tangible benefits – you’re not buying a box to fix all of your problems anymore. Vendors have to come to the table with concrete metrics and outcomes.
Q: What is the biggest barrier to procurement teams gaining traction in their organisations to be seen as more strategic/more than just number crunchers?
A: The decision really comes from the C-suite to visibly demonstrate that there is a company commitment to procurement, such as having a CPO. It can be near-impossible to progress the profile and strategic value of procurement internally without the board buy-in and the corresponding CPO position, and also provide the education necessary for the rest of the company to understand the benefits and business value of procurement.
Q: If you could give one piece of advice to a procurement team regarding analytics, what would it be?
A: Take the first step to get a hold of your data. The key is to benchmark and develop in as low-risk, flexible and scalable a way as possible. This is where self-service analytics options can be a great benefit – you can use a small portion of your data to quickly gauge the value of investing more. Once you have a benchmark in place, you can look to expand and build on that – looking for duplicate invoicing, and progressing up to supplier performance management programs. They key is in taking the first step to unlock the value of your data.
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