Keelvar sponsors Ardent Partners’ 16th annual report on The State of Procurement in 2021. The CPO-themed report features insights from interviews with over 350 procurement leaders globally.
COVID has caused a significant change in Procurement and Supply Chain, more change, more quickly than has ever been seen before. The Keelvar and Ardent Partners report captures the experience, performance, perspective and intentions of 351 procurement leaders.
19% of organisations believe that their Supply Chain was the hardest hit area of their business, with a large proportion citing cash flow and sales as the most significantly impacted area.
In response, procurement picked up momentum and demonstrated their importance to the business, helping mitigate negative cash flow impacts by extending payment terms with suppliers and helping improve margins through driving cost savings. These procurement strategies undoubtedly helped many businesses stay afloat through the hardest months of the pandemic.
“19% of organizations believe that their supply chain was the hardest hit area of their business”
CPOs have renewed priorities in 2021 based on the insights identified in 2020. Technology is seen as the biggest priority, technology in procurement can improve many aspects such as introducing AI into negotiations, simplifying workflows and automating processes.
Technology must be deployed and implemented effectively to ensure it is viable and delivers the intended benefits, poor implementation of technology can be more detrimental than not having it at all.
The importance of data cannot be underestimated and the capabilities of procurement are continuingly developing in this area. An intelligent procurement department isn’t just made up of one component such as optimised data handling, it is made up of a plethora of interacting and intertwined processes that create an ecosystem of innovation and solutions.
Most procurement organisations utilise data to help them manage and run sourcing projects, but the more advanced the utilisation of data becomes the fewer organisations are doing so, for example only 29% of organizations are utilising data in an active supply risk management programme.
“For example only 29% of organizations are utilising data in an active supply risk management programme.”
Data can also help procurement increase their agility, this can be done through the connection and integration of procurement tools to create one large and transparent ecosystem. Currently, only 27% of procurement organisations describe themselves as highly agile.
8 KEY RECOMMENDATIONS FOR CPOs
- Be proactive
- Accelerate digital transformation
- Go all-in on Big Data
- Source more aggressively
- Partner with the business to attack supply risk
- Revamp and rethink your contracts
- Re-examine and where possible reimagine the supply chain
- Empower your team