A New Procurement Agenda for the Smarter Together Era
According to Accenture, back in 2019, before the COVID-19 pandemic, ‘Leaders’ in enterprise technology adoption were growing 2x faster than tech ‘Laggards.’ The firm’s latest research on scaling enterprise digital transformation found that Leaders have doubled down on their tech investments and are now growing 5x faster than tech adoption Laggards.
Introducing the technology Leapfroggers
Accenture’s latest research also shows a new group of organizations, the ‘Leapfroggers.’ These organizations have been able to break previous performance barriers and are now growing 4x faster than Laggards, overtaking their peers, and catching up to Leaders. Leapfroggers have two distinguishing attributes: First, they’ve made investments in moving their core processes to cloud platforms that provide sufficient agility and scalability; second, they are shifting their IT budgets from operations to innovation-related activity, speeding up software development cycles, changing business processes, and building new capabilities.
Innovation will be more critical than ever moving forward
As companies move to embrace these trends, procurement leaders have the opportunity to work with IT to support this shift from operations to innovation. This is part of a broader trend in procurement of working with IT and business partners to deliver the innovation needed for success in the post-pandemic world. According to Accenture, “Leaders tend to adopt innovative technology sooner and reinvest more frequently. They make smarter tech investment decisions. And they direct their IT budget toward innovation.”
Keep your seat at the table by delivering on new priorities
Last year 60% of CPOs reported significantly increased engagement with the C-Suite. But the opportunity to retain that “seat at the table” is not guaranteed. As leaders think beyond the pandemic, the capacity to support innovation and the ability to address Environmental, Social, and Governance (ESG) issues have moved to the top of the CPO’s agenda. These priorities must be addressed on top of long-standing concerns around margins, risk, and agility.
The obstacles to achieving the new procurement agenda
CPOs must take a hard look at what they’ve learned over the past year and a half. In many cases, a lack of digital readiness and siloed systems made it extremely difficult for teams to collaborate in the face of disruption. Maintaining, extending, and integrating multiple legacy systems for spend management also puts a heavy operational burden on IT. Moving forward, these obstacles will hinder enterprises’ capacity for innovation and the ability to deliver across new agenda priorities.
BSM: A new engine to run your business in the smarter together era
CPOs have a real opportunity this year to make step-change improvements. For example, as companies are called to deliver real, measurable impact on ESG initiatives, many have realized that changing spend policy is one of the most effective levers to drive impact. One of the fastest ways to make positive change is by shifting spend to diverse suppliers. Effective community-powered BSM purchasing programs can move the ESG needle in a single quarter.
Now is the time to capitalize on the willingness of boards to invest in these priorities. By breaking down the silos for good, you can set up procurement for success in an uncertain future and position procurement to be more adaptable, innovative, and strategic. And this will anchor procurement as an engine that accelerates business growth.
Now is the time for smarter procurement
But time is limited. Without investment to eliminate the silos made painfully obvious over the past year, the functions of procurement, finance, risk, supply chain, sustainability, and others will struggle again in the next crisis. As recognition of the value of procurement and the challenges faced during the pandemic begin to fade, it will only become harder to achieve such a comprehensive end-to-end vision. Now is the time.
Download our eBook, Procurement in the Spotlight: A New Agenda for a New Era, and get started on your journey today.