Stronger partnerships between procurement and IT teams within firms are essential to faster crisis response and better decision-making, according to a report.
The report, by The Hackett Group, found the firms that had suffered the most challenges throughout the Covid-19 pandemic had “weak or non-existent” partnerships between procurement and IT.
Post-Covid, businesses will demand “resiliency, agility and better decisions around risks and innovation opportunities”, all of which can be achieved through digital transformation, the report said.
However it added: “This challenging formula is best created by a partnership between procurement and IT. Solo efforts are likely to cost too much, misalign with other initiatives, introduce unnecessary risk and overlook better options.”
Office shutdowns as a result of coronavirus had underscored the “vital importance” of functions such as procurement and IT to business continuity, the report said.
Function leaders stepped out of their respective silos and worked together to manage the shift to working from home, assess operational and financial liquidity challenges, and develop recovery strategies.
However, the report said procurement leaders at highly-impacted companies were nearly four times as likely to cite “heavy reliance on on-premises technology as a major impediment to their resiliency”.
Firms also cited the acceleration of digital transformation, automation of procurement processes and improving predictive analytics capabilities as actions they would take to improve resilience, suggesting procurement and IT had failed to work together to modernise procurement's systems and platforms, the report said.
“In an era when business units and functions can potentially source their own technology, the involvement of procurement and IT as synchronised partners is even more vital,” the report said.
“By collaborating and leveraging each other’s expertise, procurement and IT can discover and deploy true transformational solutions that not only modernise business processes and operations, but help transform business models. In doing so, procurement and IT will enhance their position as strategic partners and influencers of the enterprise,” it said.
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