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Supply Chain News: Action Steps to Make Progress on Hackett's Top Procurement Priorities for 2019

 

Building Better Analytics, Improving Agility among Procurement Imperatives for this Year

 

May 2, 2019
SCDigest Editorial Staff

Recently, SCDigest summarized the annual look at procurement for the coming year, identifying what Hackett consultants view as the top priorities in procurement for 2019.

As part of that reporting, we summarized what Hackett says are the five critical development issues for procurement in 2019. Those are:

Supply Chain Digest Says...

Hackett says procurment organizations must leverage automation to reduce time spent on low-value tasks and redeploy capacity to strategic activities such as supplier innovation and relationship management.

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The five critical development issues for procurement are:

1. Improve analytical capabilities: As the role of procurement changes, analytics accounts for one of the biggest changes in necessary capabilities. Core activities like spend analysis are moving toward real-time, custom and predictive analytics, while less-mature analytics functions like risk management will join procurement's list of fundamental responsibilities.

2. Align skills and talent with business needs: A rising topic over the last few years, in 2019 procurement must enforce a new talent profile or risk falling behind the curve in critical capabilities. "Must-have" skills include advanced analytics and data modeling, business acumen, relationship management, strategic thinking and risk management expertise.

3. Leverage supplier relationship management (SRM): While SRM has long been a core capability for procurement, it is due for a major shift in approach. Relationships between procurement and its suppliers must become much more strategic, particularly as it relates to collaboration and innovation, not just on product design, but also in the way they communicate and interact.

4. Improve procurement function agility: Agility is an important factor in all areas of business, a direct reflection of the changing market and technology advancements. For procurement, this means faster decision-making enabled by efficient technologies and adaptive staff who possess a variety of skills and competencies.


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5. Improve customer-centricity: Prioritization of customer needs and expectations is now a critical capability for procurement's success. Most importantly, procurement must become a partner for the businesses it supports, making it a priority to develop a deep understanding of business needs. And secondarily, it falls on procurement to make customer processes fast, efficient and easy to understand through means such as self-service, 24/7 support and process automation.

This week, we summarize Hackett's recommend action steps for achieving improving in each of the five critical areas identified.

To improve analytical capabilities, Hackett says procurement organization must:

• Lay the foundation for sophisticated capabilities by standardizing master data definitions, frameworks and KPIs.

• Work closely with IT to upgrade the data management architecture to support greater accessibility to more reliable enterprise data.

• Invest in staff by providing internal and external training on critical thinking and complex methodologies such as data modeling and predictive analysis.

• Pilot and scale the adoption of big-data analytics tools that can identify performance patterns to predict future outcomes and offer actionable recommendations.

To align skills and talent with business needs, procurement organizations must:


• Invest in the hiring, training and retention of top talent with skills including business acumen, relationship management and strategic thinking.

• Collaborate with the human resources organization to create comprehensive talent development programs to remedy known deficiencies.

• Leverage automation to reduce time spent on low-value tasks and redeploy capacity to strategic activities such as supplier innovation and relationship management.

To leverage SRM, procurement organizations must:

• Assess existing SRM activities to identify areas for improvement and design program to focus on supplier collaboration and innovation.

• Leverage digital tools to streamline the supplier process and enhance collaboration between buyers and sellers.

• Invest in supplier training and information-sharing to enable supplier effectiveness.

To improve procurement function agility, procurement must:

• Apply design thinking to processes to develop customized services and deliver useful information to procurement’s customers. Leverage new technologies (e.g., RPA) to reduce response time by eliminating manual processes.

• Modernize core systems that can assist procurement in delivering timely insights drawn from both complex data modeling and predictive analysis.

To improve customer-centricity, procurement organizations must:

• Leverage customer journey mapping to understand the impact on customers when designing the digital transformation strategy.

• Cross-train procurement talent in the business lines to develop a deeper understanding of business needs and to lay a foundation of partnership with procurement.

• Create an omnichannel experience for all customer interactions, including an online portal and a 24/7 phone/email help desk as well as in-person support.

So there you have it: key actions steps to take right now to make progress in key areas of procurement development.

Time to get busy!

The full report is available here with registration: 2019 CPO Agenda

What would you add to this list of action steps for top procurement priorities for 2019? Let us know your thoughts at the Feedback section below.

 

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