A New Decade and a Fresh Start for Procurement

Like most procurement service providers and analysts, the consulting team at Corcentric decided to use the arrival of a new decade to perform both a look back and a look forward into the state of the procurement function.  I had the opportunity to weigh in and provide the opening statement for our whitepaper on the topic, Procurement in 2020.

As I thought about where we have been and where we are going as an industry, I can’t help but feel a little disappointed.  For as long as I’ve seen “Procurement 2020” reports, I’ve felt (like most of us) that Procurement would finally get the respect we were due by the time 2020 came around.  After all, we know that Procurement done right can have a substantial, sustainable impact on the organizations we support.  Driving savings, simplifying the buying process, and building supplier relationships can create a competitive advantage and true differentiators that often transform a company into an industry leader.

In my opening remarks I mentioned that the first 2020 report I saw was in 2013.  Yet the recommendations and future state vision provided at that time haven’t changed much compared to the same reports that came out this year. It looks like we’ve made little, if any, forward progress over those seven years.  To figure out why, I took a close look at some of the results in the most recent Deloitte CPO Survey. The first set of statistics that stood out to me had to do with technology:

Two-thirds to three-quarters of organizations surveyed are leveraging digital technologies along the source-to-pay continuum to some extent.

Yet...

Only 3% of Procurement leaders believe their staff possess all the skills required to maximize use of digital capabilities

And…

Only 6% of Procurement leaders believe their digital strategy will help them fully deliver on their objectives

So we use technology yet openly admit it’s not going to help as much as it could, most likely because our teams don’t have the skills to properly leverage it.  Naturally, CPO’s should be looking for new talent and leveraging third parties to supplement their teams and fill the talent gap – right?  Back to the survey:

51% of procurement leaders believe their current teams do not have sufficient levels of skills and capabilities to deliver on their procurement strategy

And...

47% of procurement leaders found it more difficult to attract talent in the last 12 months

Yet...

Levels of procurement outsourcing have dropped to 10%, the lowest level in over 5 years

So we have the technology, but we don’t use it because of a talent gap, and we can’t attract nor do we plan to outsource the acquisition of that missing talent.  It reminds me of that saying, “You didn’t plan to fail; you just failed to plan.”

Let’s face it: PROCUREMENT IS A PARADOX.  We all know and clearly can see what our problems are and what addressing those problems could mean, yet we continually struggle to address these issues in a meaningful way.  When you boil it all down, Procurement still faces three issues from 2013 that we still face today:

·         First, as a function, we don’t invest – in digitization or in training.  

·         Second, Procurement still struggles to distinguish itself as a business partner.  

·         Third, when we get that seat at the executive table, we don’t use it.   

I can’t stress this enough to today’s procurement leaders:  focus on solving these problems. It’s the only way to ensure that we won’t look back at another wasted decade.