Buyers expected to achieve more despite budget cuts and fewer staff

8 April 2013

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8 April 2013 | Adam Leach

Procurement functions must deliver against a broader set of objectives this year, but face cuts to both budget and headcount.

According to Procurement Key Issues Research, published last week by The Hackett Group, while cost cutting remains top of the agenda, boards and senior business leaders are also looking for more risk management and greater innovation from procurement departments.

But despite placing this increased demand on the function, the resources available to meet the targets will be reduced, with budgets falling by 0.4 per cent and headcount by 0.5 per cent. At the same time companies expect revenues to increase by 6.5 per cent.

Chris Sawchuk, global procurement advisory practice leader at The Hackett Group, said in a statement: “For 2013, company leaders are seeking the agility to help them achieve profit targets even if revenue falls short of expectations. One key to this is for procurement and other business services to add value without increasing budget or headcount.”

Spend reduction retained its place at the top of performance measurements, but innovation moved up the agenda, joining spend influence as the joint second most important objective. Supply risk, particularly in relation to supplier compliance, also increased its prominence.

The report proposed the purchasing function would be looked upon to deliver improvements more in areas more closely aligned to the overall business objectives, such as customer service and accelerating revenue growth.

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