Fast-track to future-ready procurement
May 18, 2021
RESEARCH REPORT
In brief
In brief
- 90% of Chief Procurement Officers (CPOs) say that their organizations are under extreme pressure to extend innovation.
- Future-ready operations elevate procurement’s role, enable topline growth and reduce risk.
- Today, only 2% of CPOs view their operations as future-ready and 26% want to be there in three years.
- There are three ways for CPOs to accelerate their move to future-ready operations—and they extend beyond cost savings.
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.
90% of CPOs say that their organizations are under extreme pressure to be more innovative.
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.
01. Know the ultimate goal
Think big and collaborate across business and technology to enable business strategy and realize ROI from investments. Learn more.
02. Know the key steps
Break down functional silos by augmenting human talent with automation, using data to make better decisions. Learn more.
03. Know how to leapfrog maturity levels
Ecosystem relationships are a powerful way to leapfrog levels. CPOs are ecosystem builders for supplier and solution provider network. Learn more.
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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.
Here’s how:
Think big and go beyond cost savings
Financial value is only one part of the value equation that CPOs can deliver to the business.
Enhance intuition with high quality, diverse data
Procurement leaders can unlock business value by harnessing external data.
Scale automation, analytics and AI
Leading technologies are essential for procurement to realize the full value of data and act as a true strategic partner to the business.
Foster a specialized human + machine workforce
The magic happens when technology and human ingenuity meet to transform how procurement works.
Build complementary ecosystem relationships
Partners can help procurement break through its technology gap and focus on core strengths.
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Client case studies
Intelligent procurement saves $24M
A leading chemical company freed up money to reinvest in growth by moving to a digital procurement organization. Learn more.
Realizing $1B in savings
A consumer goods giant reinvented procurement by moving to a data-driven operating model. Learn more.
Bank uses intelligent procurement to cut risk
Global financial institution moved to digital procurement function to outmaneuver uncertainty and boost compliance. Learn more.
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