Dramatic market events, such as the pandemic, are a catalyst for bold change in the procurement organization.
Although procurement touches every part of the business every day, it is often undervalued. Supplies are sourced. Purchases are made. Invoices are paid. It all happens without attracting much attention. But in recent years, the business started to see procurement more as a strategic partner with a unique ability to influence a wide range of value levers. The pandemic sped up this shift, raising the stakes for Chief Procurement Officers (CPOs) and influencing how procurement organizations will operate in the future.
Flash back to the start of the pandemic. Manufacturers were shut down. Supply chains were disrupted. Business continuity hung in the balance. Procurement organizations supported the business as only they could working with key suppliers to reduce negative impacts and find alternative supply sources when necessary. They also evaluated contracts to anticipate operational and reputational risks and assessed their effects on the business.
Actions like these demonstrated how procurement can create a competitive advantage for the business. CPOs can—and should—build on this momentum.
Innovating in procurement means being more proactive and predictive. This goes beyond driving cost savings and toward working new ways—collaborating with business stakeholders across departments to understand their needs—planning together using data insights to predict future trends, supporting sustainability and more. When procurement is a true business partner, it can unleash breakthrough value. This kind of innovation requires a data-powered operating model and operations maturity.
The future of procurement starts here
Accenture’s global research indicates that operating model maturity is advancing among global organizations. Our research and experience reveal four levels of operations maturity: stable, efficient, predictive and future-ready. Each level is grounded in and enabled by increasingly more sophisticated technology, talent, processes and data insights.
On average, we found future-ready organizations to be:
Procurement leaders say that their organization’s operations maturity has improved and they are optimistic about more progress in the next three years.
Just 4% of procurement leaders say that their organizations were predictive three years ago. None had future-ready operations. Today, 61% view their operations as predictive, and 2% call them future-ready. By 2023, 65% expect to have predictive operations, and 26% expect to be future-ready.
A deeper dive into operations maturity
To better understand procurement leaders’ views of operations maturity, consider how we measure future readiness. It reflects an organization’s ability to scale eight characteristics of operating model maturity: analytics, automation, data, stakeholder experiences, AI, business-technology collaboration, functional and industry leading practices and workforce agility.
Procurement leaders rate their organizations slightly above average for two of the eight characteristics (agile and stakeholder) in wide use or use at scale, which aligns with the fact that most see their organizations as being predictive.
Knowledge is power
We have identified three procurement strategies to accelerate their move towards a future-ready state.
Now is the time to make your move to intelligent operations
The work of procurement may often be undervalued, but it is the backbone of the business. As CPOs embrace their growing strategic role and take that proverbial “seat at the table,” they can help the business along its journey to future readiness by leading by example.
Many of the keys of operations maturity—such as automation, data insight, an agile workforce, cloud at scale, and ecosystem relationships—exist in procurement today. This gives CPOs an excellent foundation to build on as they continue to push toward intelligent operations in their own area as well.