New data from The Hackett Group reveals that while two-thirds of procurement leaders (twice the percentage recorded last year) have an implemented digital transformation strategy, the budgets they need to implement them may not be available. Procurement budgets are forecast “to remain virtually flat in 2018”.
The data shows that chief procurement officers (CPOs) are well aware of the immense benefits of digital transformation, including spend analytics and cost reduction. But they’re equally acutely aware of the cybersecurity risks that accompany such tech-intensive processes.
The Hackett report notes that organisations are highly conscious of the fact that the unrelenting wave of data attacks (think Facebook’s Cambridge Analytics scandal and the recent data breach in Lord & Taylor stores) will continue, and that organisations are tasked not only with developing better ways to use data but to take all the necessary measures to protect it, too.
95% of the CPOs polled by The Hackett Group believe in the potential of digital solutions for procurement transformation but are hampered in progressing with these solutions by their organisations’ continued focus on cost reduction. Nearly 75% of the companies surveyed in the report placed “enterprise operating cost reduction” as a major initiative for 2018.
As the report also states that procurement budgets will be cut by 0.3% on average in 2018, adopting new technology to deliver that coveted procurement transformation is likely to be well-nigh impossible – especially as 74% of the companies polled ranked lack of access to the necessary talent to deliver it as a high risk.
Which is perhaps where procurement as a service may have a pivotal role to play. Independent procurement advisory services such as Odesma already have the cutting-edge digital resources and interim procurement talent in place to deliver procurement transformation and cost reduction to organisations that need to grow while keeping a close eye on the bottom line.
Nick has over 30 years procurement experience in consulting, outsourcing and line roles within industry with international experience across many sectors and industries and led many procurement programs with blue chip organisations.