This week’s featured webinar was hosted by ISM and presented by Chris Sawchuk, Principal and Global Procurement Advisory Practice Leader at The Hackett Group. In ‘Key Procurement Issues in 2013: Going Deeper and Broader for Borderless Procurement’ we heard the application of Hackett’s ‘Borderless Business’ concept to the world of procurement, focusing on the priorities being set by leading organizations for performance and capability building.
The ‘borderless procurement’ concept was applied in three ways: data, geography, and process. In order to perform well in a volatile environment, procurement teams must become more agile. We need to operate without (or across) borders to create the right environment for sustainable results. The capabilities we’ll need in order to accomplish this include category management, relationship management, focusing upstream in the supply chain on suppliers and supply markets.
Based on research done by the Hackett group, around 80% of leading procurement groups have ‘real time’ spend visibility, meaning visibility in systems in one day. Although we have access to data faster than ever before, it still does not equal intelligence. Opportunities exist to better utilize external sources of data. The challenge of making sense of it all remains, and although many teams are applying structure through supplier information management, companies are looking to procurement for predictive information – supporting their need to plan based on what will likely happen.
Being a global organization goes beyond having a global supply base. Despite sourcing abroad, many organizations are still managing people/process/technology regionally or locally. The constraints we are likely to face in the future will force us to rethink resource allocation, going beyond today’s average of 12% FTEs in low cost countries.
Procurement’s relationship with processes is most often based on the strategic sourcing processes we are used to executing. Going forward, we need to be an enabler of all corporate processes – including M&A and product development – rather than just carrying out our own. For leading procurement organizations, the expectation is that SRM processes will exceed eSourcing in terms of value creation.