At a roundtable discussion at the CPO Outlook 2002 event, the focus was on inflationary markets and how that is having an impact on Procurement’s priorities and value measurement. We recap what attendees had to say as the C-suite looks to Procurement to anticipate market trends. offset rising costs, and more clearly and accurately measure those impacts and non-financial performance.
We invite you to view the eBook providing more detail about the highlights from this discussion.
From the leaders and practitioners who attended this roundtable, we learned about their current experience and thoughts on how Procurement is navigating external influences outside their control. Several specific questions were posed to the participants, which are covered in the eBook:
- How has inflation impacted Procurement organizations?
- How is the definition of performance success in procurement changing?
- How can technology help Procurement better navigate this complex, uncertain, and always-moving world?
So, what are some of the things the CPO Outlook attendees had to say?
“Priorities have changed”
Procurement is under pressure from multiple areas, from negotiating with suppliers to managing board expectations. It’s difficult to prioritize strategic, longer-term planning over day-to-day operations. Those with a significant number of suppliers are using up procurement resources fielding communications from suppliers, constraining the team, and forcing resource allocation to focus on more tactical, reactive work and less strategic value.
“Cross-functional communication is more important than ever”
Many in Procurement say they now feel that they are in center stage. They see value in working closely with Finance but also with spend category stakeholders and even Sales to unlock hidden value.
“Suppliers are demanding price increases”
Some report feeling a shift in power, with suppliers starting to dictate the agenda. Supplier price increases are difficult to combat, with continuity of supply prioritized over cost reduction in many cases. As a result, supplier relationship management is crucial.
“Success measurements are evolving”
The definition of performance success in procurement has changed, and more and more organisations have shifted their focus from only tracking cost savings to measuring additional factors, including things like:
- Margins, not just cost reductions
- Reducing risk to the business and ensuring continuity of operations
- ESG (Environmental, Social, and Governance) progress, including supplier diversity
- Strengthening supplier relationships
“Procurement tools are essential.”
There is recognition of the need for procurement tools to track the progress and outcomes of projects, and those tools should be able to track cost and non-financial measures – ESG, sustainability, supplier diversity, and more. The majority of participants have developed home-grown systems using tools including Excel, SharePoint, or even PowerPoint to try to fill this need.
Based on the roundtable discussion, it’s apparent that Procurement would be ideally served with an appropriate, enterprise-grade solution to help here, such as the Procurement-designed solution Per Angusta that makes it easy for them to:
- Use data to identify where they can drive new value or benefit – especially where cost savings are not possible right now – and get buy-in to initiate those projects
- Improve cross-team collaboration to prioritize initiatives and set appropriate financial and / or non-financial performance goals
- Actively track those procurement initiatives for risks to goals or other business impacts
- Gain clear, transparent reporting of outcomes for Finance and stakeholders at any time it’s needed, with data that trusted and indisputable
- Proactively anticipate contract renegotiation opportunities to generate better terms, value, benefits, or ESG progress
- Leverage project outcomes, supplier data, and contract information to improve spend intelligence and therefore ongoing decision making
Procurement leaders should identify where the next solution is to help them drive innovation and efficiency as situations evolve over time, building resiliency and responsiveness. SpendHQ’s Per Angusta Procurement Performance Management and Spend Intelligence solutions are market proven to drive results.
Read more about this roundtable in our eBook.
Or request a product demo to see how our solutions can address challenges in inflationary market conditions.