Stakeholder resistance and a lack of critical skills are among the largest obstacles preventing procurement from introducing more efficient processes, according to a report.
In the report, consultancy The Hackett Group said procurement firms are having to adapt following an “extremely volatile year”, which has put spend cost reduction firmly back at the top of the agenda.
As a result, procurement departments are ideally positioned to provide businesses with stability and supply assurance, the report said.
Yet despite the drive to save costs, the need for swift and decisive action during the pandemic has “pushed procurement beyond its traditional hesitancy” of adopting new tools. Hackett believes this will lead to broader implementation and adoption of modern enabling tools, such as artificial intelligence and smart automation.
However, to realise these changes, communication with stakeholders and partners will be key. “As procurement enters the new normal, it is critical to bring employees and stakeholders along at the right pace and with as much information and buy-in as possible”, the report said.
The Hackett Group polled procurement professionals to identify the biggest challenges to procurement transformation in 2021.
According to the results, while the top barrier to implementing a successful transformation is a lack of cultural or stakeholder buy-in for changes, this is closely followed by a deficiency in critical skills, and the inability to manage a large organisation with a complex structure.
It added that these barriers demonstrate the “need for continued focus on people development and engagement” in procurement. “Procurement must have the appropriate skills and competencies to support its own transformation efforts, or progress is impossible,” it said.
Kavita Cooper, MD at procurement firm Novo-K, told SM: “Getting buy-in can be achieved by procurement improving its PR and promoting its position as a critical support function, and not as a last-minute saviour or lead role – like a Yoda not Luke Skywalker.
“This can also be achieved by showing alignment with the organisation's aims, for example, by delivering more than savings through supporting revenue generation.
“Address the deficiency in critical skills by understanding the knowledge and skill gaps through talent mapping. A targeted training programme should be implemented to develop a high-performing team with a consistent standardised approach, and help retain talent and attract new recruits.”
The Hackett Group’s eight barriers to procurement transformation are:
1. Stakeholder resistance to change
2. Procurement staff deficiency in critical skills
3. Organisational complexity
4. Overcommitment of initiatives
5. Data-related issues, such as poor quality and security of governance
6. Inadequate use of funding or resources
7. Process complexity
8. Lack of commitment from enterprise executives.