The Hackett Group Senior Manager Vicky Kavan talks with Principal Chris Sawchuk and Principal Timothy Yoo about key findings from our 2022 Procurement Key Issues Research, which outlines changing trends, priorities, and challenges facing the procurement function.
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 of the podcast is hosted by Vicky Kavan, Senior Manager of Sourcing and Procurement at The Hackett Group’s Senior Director. Her guests today are Timothy Yoo and Chris Sawchuk who both work in procurement for Hackett Group. The subject for today’s discussion is Hackett’s Procurement Insights.
The Hackett Group runs a key issues study annually to identify the impact of changing trends and guide research for the following year. One of the strongest themes to come from this year’s study was the importance of procurement issues. Supply Risk moved up to the number one spot ahead of cost production. Chris explains that the number of areas for supply chain leaders has broadened. Tim agrees that diversifying supply chain assurance and managing third party risk have been big growth areas for the procurement teams at The Hackett Group.
Leaders in procurement have similar agenda items across organizations, with focuses on supply assurance and protecting revenue. Cost has gone down to number four or five on the list, but is still the easiest item to measure. Chris says that we need to measure assurance and sustainability as well because they are growing in importance and what gets measured gets done. He wants to bring visibility to sustainability and drive behavior to adjust carbon footprint. Measurements for assurance and sustainability won’t be as exact as cost measuring, but Chris is certain that by collecting quantitative data changes can still be made. Tim says that designing processes with ESG in mind can help make the change to measuring sustainability.
Supply chain disruptions have been an issue throughout the pandemic. Something else the pandemic has brought to light is the need for more digital solutions, something Tim says The Hackett Group has never been so busy with before now. Investing in these digital solutions and a little bit of preparation can go a long way to growing your cloud base suite and make your digital transformation smoother. The pandemic exposed organizations that hadn’t invested in digital transformation, and Chris says looking at the glass half full, it has also given those organizations who were behind a reason to catch up. It’s not just about technology, it’s also about improving customer experience, increasing velocity, and investing in procurement professionals.
Today, Chris says there is a gap in data, analytics, and technology in procurement organizations. These are critical areas for procurement professionals. Analyzing and using data to predict risks is essential to becoming a trusted advisor to the organizations they support. Chris says that procurement professionals shouldn’t be outsourcing data analysis to third parties, but rather investing in it in house so they can have the most up-to-date information possible. Tim’s advice to organizations beginning their digital transformation is to plan appropriately. He recommends thinking about not only the resources you’ll need to implement the digital change, but also what resources will be needed to sustain it.
Workload in 2022 is going to increase over 11% and procurement organizations are recognizing that they need to meet those demands with technology, rather than relying solely on labor as they have in the past. Tim says that procurement organizations should be removing constraints to find the best talent. He and Chris agree that the globalization of the talent pool is one of the best ways we’re removing barriers to labor. Tim also suggests that organizations get creative in candidate backgrounds. He suggests that procurement backgrounds may be less important than technology and data analysis backgrounds as organizations begin their digital transformations.
- 0:53 – Welcome to this episode, hosted by Vicky Kavan
- 1:06 – Introducing today’s discussion topic.
- 2:14 – Chris discusses a newfound emphasis on procurement.
- 5:42 – How do risk and sustainability factor in?
- 10:19 – The pandemics effect on a digital transformation
- 14:47 – What capabilities procurement has in the digital transformation
- 22:14 – Procurement labor and technology