Agility key to success of procurement's future winners

18 May 2015

CPOs must develop an “agility agenda” if they are to keep up with the changing marketplace, according to a study.

A report by Ardent Partners predicted CPOs will be forced to redefine their current approaches to keep pace with the fast-changing needs of enterprises and increasingly volatile market conditions.

CPO Rising: the Agility Agenda is based on the views of 318 chief procurement officers and other purchasing executives, and includes benchmarks and analysis on the state of procurement.

The report concluded: “The winners in procurement will be the agile organisations that can leverage their strategic prowess and fluid resources to anticipate and support dynamic business requirements amid the more rapid changes in industry, supply markets and customer behaviours.”

The report makes recommendations for CPOs and procurement departments looking to improve their performance. These include getting engaged earlier on in sourcing opportunities, using new technology, fostering supplier innovation, developing a spend under management “pipeline”, and moving away from a savings-centric view.

CPOs should also develop an “agility agenda”, the report suggests, that embeds their organisations with agile and innovative characteristics while maintaining discipline and efficiency.

The study suggests that critical areas for the agenda are:

• A fluid organisational structure that prizes skills over experience, an open flow of information and communication, adaptable and responsive people and fluid resource allocation
• Standardised, automated, streamlined and scalable procurement processes managed by a team constantly looking to eliminate complexity and barriers
• Regular and proactive management and operational improvement
• Cloud-based, easy-to-use, and easy to adopt supply management technology, which supports collaboration, with strong reporting and analytics
• A balanced approach to measuring and evaluating metrics.

The study concluded the procurement profession needs new, more adaptive strategies and approaches to propel it to the next level of performance.

“Agility is the characteristic that will help procurement departments advance and thrive in this new age where innovation continues to expand beyond mere products and services to core business processes and entire business models. Agility, however, does not grow organically. CPOs must take deliberated steps to build agility into the DNA of their staffs and operations and it starts with the agility agenda.”

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