Take advantage of Brexit uncertainty to initiate change

25 November 2016

Procurement should have a higher profile and the uncertainty created by the UK’s vote to leave the EU provided an opportunity, a report has said.

The survey of 278 senior figures in procurement found that one in four expected Brexit to increase the value of procurement in their organisations.

It said that uncertainty created the opportunity for procurement to demonstrate its value, with proactive management of costs and suppliers helping to mitigate the impact of market and currency fluctuations.

Managing Uncertainty: Why procurement can make a difference, was conducted by Expense Reduction Analysts (ERA), in the wake of the referendum results.

It said: “The ramifications of a wide range of current affairs are likely to increase the focus on cost, efficiency and supply chain.”

“Procurement teams need to be braver and more vocal than ever before. Uncertainty presents procurement professionals with a real opportunity within organisations to initiate change.”

However, nearly 60% of senior procurement figures questioned in a survey said that their company did not have a procurement officer on the board. This is despite the fact that 94% felt that more investment in procurement would boost profits.

Nearly all (99%) of the respondents believed procurement should have a higher profile in their organisation.

The report concluded that there was a need to educate directors about the procurement function and how it could help deal with the biggest challenges that a business can face.

It highlighted the potential for a disconnect between procurement, the supply chain and overall business strategy, and the fact that most senior managers felt that the lack of a clear strategic vision was the biggest barrier to allow them to add value to the business.

Many senior managers felt inhibited by a lack of support from the very top of a business, the study also found. And 63% of respondents said they would benefit from external resources to help within procurement.

The report concludes: “As procurement departments take on an ever more complex array of tasks, hiring staff to cover every category or eventuality, from fleet management to logistics or payment systems, is a waste of resource.”

Organisations also needed to redefine their expectations of procurement, the study said. Although the procurement function was confident of its ability to make an important difference to businesses, there was a need to win over the rest of the business.

The study also looked at opinions surrounding the impact of Brexit, and the ERA survey seemed to demonstrate that procurement managers are generally optimistic.

Of those surveyed, 49% expected Brexit to have little or no impact on their business, 25% felt it would be worse, with 10% feeling it would be good. More than half (55%) believed that Brexit would make no difference to procurement.

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