What priorities and challenges do procurement leaders expect to face in 2023? An overview of our latest Procurement Key Issues research with Senior Research Director Amy Hillcox and Principal and Global Procurement Advisory Practice Leader Chris Sawchuk.
Welcome to The Hackett Group’s “Business Excelleration Podcast,” where week after week we hear from experts on how to avoid obstacles, manage detours and celebrate milestones on the journey to world-class performance. This episode is hosted by Gary Baker, Group Global Communications director at The Hackett Group. Today’s episode will discuss the results from The Hackett Groups’s annual Procurement Key Issues research, outlining what procurement leaders are currently focused on. Gary is joined by Amy Hillcox, senior research director, and Chris Sawchuk, principal and Global Procurement Advisory practice leader.
To begin, Amy outlines the Procurement Key Issues Study for 2023. The purpose of the study, she shares, was to take polls of what is currently top of mind for procurement leadership teams, in addition to what they’re looking at tackling for the year ahead. Categories include top objectives for the year, prospective initiatives, business partnering, procurement management team incentives, workloads, budgets, technology and more. They also asked enterprise questions aimed at understanding the key challenges the entire organization will be tackling for the year ahead.
Then, Chris lays out the first top five key priorities for procurement. Of these, some are similar to what we have seen over the last few years. Something new, however, is a reordering of the priorities organizations are having looking to the new year. Topping the list is the area of supply continuity. This is most concerning to product-based and manufacturing organizations but is a relatively high concern for all companies right now. Following this is the focus on combating inflationary pressures in the marketplace. These pressures are still prevalent across the board and are driven based on the continuity of the issues around access to supply. This leads us to reducing spend costs. In this environment, buyers become much more aggressive to reduce cost across many categories of spend. No. 4 looks at an elevation in the focus on digital transformation. There is a realization that our future has to include the development and architecture of a much more digital future. Finally, is analytics and insights, or the foundation of the digital transformation we are seeing in organizations.
Following Chris, Amy outlines the other five top key procurement priorities. Next is strength and third-party risk management divisibility and capability. This is all about anticipating upcoming events and reacting to them effectively. We saw this emerge as the pandemic shed light on the gaps in our supply chains, and Amy expects it will continue moving forward. To build the capabilities necessary to identify gaps in the supply chain, companies need to ensure their data capabilities and technology are up to date. There should also be cross-functional collaboration among the team to create visibility. The next three priorities are acting as a strategic advisor to the business, improving stakeholder-centricity and improving procurement agility. Fundamentally, these are all about the relationships organizations have with their stakeholders. Moving forward, she believes, the main focus will be around becoming the best procurement team you can be as a competitive advantage. Finally, the last focus is embedding responsible procurement.
The biggest surprises from this year’s list from Chris’ perspective was that talent management was not mentioned. Talent is foundational for organizations to become a strategic business advisor. Compared to previous years, we have found that talent has fallen off the main radar. However, this doesn’t mean that it is no longer a focus for procurement organizations. We are finding that organizations today are feeling like they have a better handle on their talent now compared to the last several years. As he regularly speaks to many procurement leaders, Chris shares that this list is definitely an accurate representation of what they are currently discussing. Moving forward, one of the biggest areas he is seeing discussed is around how to create value and other competitive advantages for organizations. It is important that we begin to change our lens and determine whether we are creating a differentiator, or advantage, for our companies. All of the top 10 categories previously mentioned should be leveraged to create this competitive advantage in the marketplace.
- 0:44 – Welcome to this episode hosted by Gary Baker.
- 1:17 – Outlining the Procurement Key Issues Study for 2023.
- 2:23 – What stands out for 2023 compared to previous years?
- 3:53 – Chris highlights the top five key priorities for procurement.
- 8:32 – Amy highlights the other five key priorities.
- 14:26 – The surprises of this top 10 list.
- 16:15 – What Chris is hearing from procurement leaders.