Key Priorities for Procurement Leaders in 2023
Looking beyond supply chain uncertainties amid the pandemic, procurement teams are focusing on a transformation agenda for 2023 that incorporates the lessons learned from the crisis, as well as emerging opportunities. Through all the upheaval, procurement leaders must maintain a laser-like focus on strengthening the supply base's resilience, enhancing the company's value (for instance, through sustainability), and delivering substantial performance gains.?
While businesses plan to return to growth and expansion, supply chain and inflationary disruptions can impact their procurement agendas. In this article, we have highlighted some key priorities for procurement leaders that can help them succeed in 2023 and beyond.?
Focus around Digital Transformation
According to research by McKinsey, over 69% of procurement leaders considered digital and analytic solutions to be more valuable in the next normal, with greater potential for improving procurement’s effectiveness. Over time, procurement leaders have understood the importance of utilising analytic capabilities and digital procurement tools for achieving their top priorities.
Prior to the pandemic, many organisations faced pressures in achieving their targets and suffered due to fragmented data spread all across their platforms and business units. Furthermore, long-tail spend components impacted their process optimisation and required high manual effort for analysis. By implementing digital solutions, procurement leaders were able to quickly build a balanced, cross-functional sourcing landscape that helped them make informed decisions. While many companies are still installing this modern digital architecture and replacing legacy tools, digital transformation is still a top priority for 2023.
New Opportunities with Suppliers
As companies shift focus beyond just costs, procurement leaders have realised the value of supplier collaboration in boosting revenue and profit margins. In fact, a survey outlined that up to 88% of respondents have planned or initiated joint-innovation programs in collaboration with their suppliers. These collaborations focus on improvising processes, services, and product innovations while unlocking untapped sources of value. By incorporating such joint programs, companies have managed to not just improve their profits but also favour their supply chain stability.
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Creating Capabilities with Broader Value Contribution
For a long time, procurement was perceived as a mere cost-cutting function. However, the growing supply market and socioeconomic conditions have placed risk mitigation and corporate sustainability at higher priority. For many companies, sustainability has been the top priority of their environmental, social and governance (ESG) agenda. This has resulted in evolution of procurement operational plans to support the ESG goals. Mentioned-below are some steps that can help build sustainable supply chains:
Customer Centricity
In response to rising customer demand, leading organisations are reimagining their operations to deliver greater value. To gain a competitive advantage, businesses are focusing on creating customised customer experiences this year. In fact, incorporating an AI-powered automation tool with dynamic customer response can help organisations identify and prioritise the best actions for response, action, and reaction.
Through AI-powered tools, organisations can also map customer decision journeys and design workflows that can offer a consistent customer experience. An IBM study also highlighted that 75% of executives whose organisations were implementing intelligent automation mentioned that their digital initiatives are delivering the greatest value to the customer experience.?
Conclusion?
As many businesses focus on recovery for the next normal, procurement leaders are focusing on creating value by utilising the right operating model elements. To sustain momentum, procurement teams are embarking on a capability-building journey and addressing key issues that can impact long-term value.
To help procurement teams reach their goals, Procol offers an intelligent procurement software embedded with AI-enabled capabilities. Procol’s e-procurement solution allows procurement teams to digitise and automate their source-to-contract process along with detailed supplier benchmarking. The software is equipped with features such as spend analytics, supplier management, tail spend management, sourcing optimiser, eRFx, and much more. Schedule your demo today to power your digital transformation with Procol!