Lack of board support a barrier to moving beyond ‘cost-killing’

Will Green is news editor of Supply Management
28 November 2013

28 November 2013 | Will Green

Almost a third of procurement professionals say a lack of board-level support is hindering their ability to create value.

The Ivalua Procurement Executives Survey 2013 found lack of internal collaboration was the second most cited barrier, followed by poor data visibility.

A majority of buyers (64 per cent) said early involvement of procurement in the product lifecycle management process was the most important factor in creating value, followed by linking procurement to global objectives (59 per cent) and implementing procurement technologies (58 per cent).

The report said: “These elements are the prerequisite of procurement performance and of achieving a more strategic role for the procurement departments.

“According to respondents, the procurement departments can fulfil their potential only when integrated upstream in the value chain of their business: at strategic level during the global corporate strategy definition stage and at operational level during the design phase of a new product or of a purchasing project.”

More than nine in 10 respondents said the role of procurement extended beyond “cost-killing” to creating value, and almost three quarters said the objectives of their departments were aligned to the global objectives of their company.

The report said: “The survey shows that procurement managers aspire beyond cost-killing to establish a procurement approach based on growth and global value creation for their companies.

“Innovation and risk management have become the areas in which the procurement departments believe they have the most potential for value creation.”

Ivalua surveyed 457 purchasers globally.

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