As I was standing in line at the local grocery store yesterday patiently waiting to purchase my groceries, I was listening to the cashier interact with the gentleman ahead of me. They were discussing the reward system that the store offers when you buy certain products. I was reminded of the disconnect that frequently exists between customers and their providers. After a few minutes with no resolution, the cashier finally resorted to calling over the store manager to further explain the system to the gentleman and clear up any confusion that occurred.
It was hard not to notice the frustration in both the gentlemen’s and the cashier’s voice during the exchange. It got me thinking about the challenges that purchasing departments might face.
While some procurement departments have embraced and adapted new strategies in the past few years to keep up with the vast changing economy, others struggle to tailor their focus.
According to a recent Deloitte Global CPO Survey 2016, 62% of CPO’s feel their teams lack the skills they need to deliver their procurement strategy. This statistic is frightening when you think about how much procurement plays a role in your corporate performance. From retaining existing relationships, growing organic business, creating cost reduction and more. Having a skilled set of individuals who have the abilities to perform cross functions is vital.
Corporations who take a proactive approach to fuel their team with the right individuals, education and training will find themselves in a better position to anticipate complex challenges that come their way. This will decrease the risk of negatively impacting the company’s bottom line while adapting new strategies and practices that will move the corporate brand forward.
Another struggle that isn’t subsiding is the organization of information and investment in new technologies. Deloitte states in their Global CPO Survey:
Disruptive technologies are emerging that have the potential to build capabilities and to provide procurement with the ability to navigate the key challenges faced by the function, through the opportunity to greatly improve accuracy, speed of execution, relevance to the business, and outcomes.
Who wouldn’t want a technology that can boost your turn around time, track your data and provide self-service to your customers? The best part, your customers reap most of the benefits. Deloitte reports, 70% of CPO’s in 2015 are now investing heavily in innovative digital solutions to support their procurement activities compared to 43% in 2014.
Innovation and implementation of new technologies at your organization will create value by streamlining existing product development or outsourcing functions of your organization that are non-essential.
Questions you should be asking
What operational changes and techniques am I using across my organization to reduce risk and save money?
Do I have the right technology and team members to make our processes as efficient and organized as possible?
Are the processes I use giving us a competitive edge across the procurement landscape? Are we addressing issues that our customers face and giving them peace of mind when it comes to their risks?
Make sure you know the risks for not adapting to the future of the procurement landscape. Analyze your process and teams so you have the necessary tools to tackle complex challenges your purchasing team could face.
Learn more about how our procurement strategies can simplify your life here.
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