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2014 Annual State of Procurement


2014 Annual State of Procurement

I highly recommend the 2014 Annual State of Procurement Report of Ardent Partners. It gives a very good overview of how procurement has progressed in the last 5 years, but more importantly shows clear trends:

Procurement is gaining more and more influence. 43% of CPO's have a significant influence or top role. With that come higher expectations - "2014 is the time for CPOs to move beyond managing only the basic duties of their function."

Top 2014 priorities to deliver on are no longer just short term cost savings. Influencing overall performance and effectiveness of the supply chain is on the agenda today.
To get there, the CPO bets on improving collaboration with other functions, improving collaboration with suppliers and on better use of technology. That is the only way to do better with the same.

CPO's also indicated priorities for the next 3 years, with a clear trend: "As CPO priorities shift, innovation and compliance have emerged as the two fastest rising areas of focus for CPOs around the world."

In the context of these trends, Andrew Bartolini recommends strategies for success in the next years, of which I list here a selection of new strategies:

"Use 2014 as the year to begin rethinking and redefining the purpose of the procurement operation - Efficiency and effectiveness as performance differentiators for business functions are beginning to give way to agility, innovation, and collaboration".

"Turn supplier relationship management into an opportunity to create incremental value and develop innovation – No company or procurement department has cornered the market on intelligence and good ideas."

But, these opportunities and those that lie ahead cannot come at the expense of today. So an important challenge for the CPO and his organization will be the need to be ambidextrous (the capability to write with both left and right hand): "They must balance the business' need for agility, collaboration, and innovation with the discipline and focus required to extract more value from the function today, by stretching the limits of their organizations and doing better with same."

For a full version of the report, including also benchmarks in procurement performance and adoption of technology, consult it on the website of Ardent Partners, where you'll find download links.
For help with enabling your organization to build innovative, agile and collaborative supply chains AND deliver against day to day business needs, contact us. We help you in defining strategy, enabling your people, setting up the right processes and tools, and can even temporarily work on your team.
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