Cost Efficiency Drives Value for Procurement Organizations

Source: “Achieving Procurement Excellence in the Age of Digital Disruption” by The Hackett Group

Cost reduction is at the top of the agenda for any business, according to an article by The Hackett Group titled, “Achieving Procurement Excellence in the Age of Digital Disruption.” The report highlights five key areas of development that procurement organizations need to address to deliver new value and higher efficiency:

• Improve procurement agility to predict and respond quickly to change
• Become a trusted advisor to the business to maintain beneficial partnerships
• Align skills and talent with business needs to develop soft and hard skills
• Modernize application platforms to enable flexibility and free up time
• Improve analytics and reporting capabilities to make strategic decisions

Many businesses are already implementing these practices to transform their organization, but there is still a long way to go. For any company, undergoing change can be a difficult process. There may be barriers that prevent it, such as push-back from the inside or issues with new technology. Despite this, procurement organizations must embrace technology, data, analytics, agility, and talent/skills on their road to becoming value driven. With that goal in mind, business leaders should develop a change management plan that they can show to customers and stakeholders that lets them see the long-term vision.

For more information, see a summary of this paper at Inside Supply Management Magazine.