Make the Case for Change: Five Questions Every CPO Should Be Asking
The pandemic exposed vulnerabilities and fragilities of supply chains, prompting companies to digitize their businesses for visibility and efficiencies. Many procurement functions operate with a technology deficit, lacking basic visibility to spend across the organization and supply chain. This makes it difficult to mitigate risk and ensure supply continuity, and work on strategic initiatives such as co-innovating with suppliers. CPOs should review these five key questions to make a case for change. Executives report that 77% can't gain a clear view of overall spend automatically, in real time, and only 50% can quickly find alternative sources of supply.
Procurement Transformations and Challenges
- BHP's centralization of procurement led to a transformation, enabling the function to align with BHP's strategy and become a value-adding partner.
- Accenture used SAP solutions to harmonize its procurement operations and improve spend visibility across different categories.
- Capgemini's use of SAP Fieldglass has been transformative, automating and standardizing the sourcing, engagement, management, and pay of contingent workers.
- Low adoption of new processes and technologies within the procurement function is a barrier to digital transformation.
- Only 41% of procurement functions have most of the skills and capabilities needed to adopt new technologies, indicating a clear talent gap.
- Only 38% of procurement functions have the skills and capabilities to understand business functions to add value.
- Accelerating adoption of predictive analytics and AI/machine learning would help procurement make more informed decisions, mitigate risk, and support stakeholders.
- SAP Ariba Spend Analysis, Supplier Management, and Supply Chain Collaboration provide data-driven decision-making insights. Only 54% of procurement technologies enable them to make data-driven decisions about procurement.
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