2022 Procurement Key Issues Research Finds
Sustainability Rising in Importance as Digital Transformation
Remains a Key Focus
Supply assurance is now the top priority for procurement,
according to 2022 Procurement Key Issues research from The Hackett
Group, Inc. (NASDAQ: HCKT). Sustainability has also risen more than
any other procurement priority for 2022, as digital transformation
remains a key focus.
2022 is quickly shaping up to be a challenging year for
procurement, with key business risks, including increased supply
chain disruption, inflation, commodity volatility, and labor and
skills challenges, on top of the need to deliver cost savings in an
inflationary environment. According to the research, the agenda for
today’s CPO is now much broader than just a few years ago.
The full research, “The Procurement Agenda: 2022 Key Issues,” is
available from The Hackett Group® on a complimentary basis, with
registration, at this link:
http://go.poweredbyhackett.com/22prockey2201sm.
Key findings include:
Supply Assurance Elevated to Top
Priority – Managing supply disruption and its impact on revenue
remains procurement’s top priority, up from second in the previous
year’s study. Cost-cutting, traditionally procurement’s number one
priority, has slipped to the number two spot. This reflects
continued disruptions driven by the global pandemic. The pandemic
has also given suppliers greater leverage and control in the buying
relationship – and procurement must adapt. Fallout from the growing
conflict with Russia over the Ukraine may further accentuate supply
disruption concerns. The key to addressing this is to build
resilience by developing capabilities in supplier relationship
management, improving analytics to better identify and predict
supply chain challenges, and overall digital transformation.
Sustainability Rises in Importance –
Sustainability rose more than any other procurement priority for
2022, jumping up four spots to the number four position, the
research found. While sustainability has long been a top priority
in Europe, it is now a much greater priority for U.S. companies. In
addition, corporate social responsibility, including diversity,
equality and inclusion, another key part of the environmental,
social, and governance (ESG) agenda, continues to climb the ranks
of priorities for many companies. These are areas where procurement
can make significant impact. Procurement must be able to source
responsibly to support the longer-term business impacts of climate
change and diversity commitments and adapt to support ESG strategy
and the execution of operational plans.
Digital Transformation Remains a Key Focus
– Digital transformation remains a front and center enabler,
now with a greater focus on obtaining value from technology
investments and an increased rigor around data management to
deliver up-to-date insights that inform supply risk, sourcing, and
supply management, according to The Hackett Group’s research.
Procurement leaders expect an 8% increase in capital investment and
technology costs in 2022, in large part to drive digital
transformation. Digital workforce enablement and core procurement
application suites have the highest level of large-scale adoption
in procurement. Data visualization and master data management tools
are not far behind, and are also expected to see accelerated
growth. But for digital transformation to be successful,
procurement organizations must also focus on talent and data, the
research suggested.
Critical Areas for Development – Five
of procurement’s top 10 priorities for 2022 are deemed “critical
development areas,” with high importance but low confidence in
procurement’s ability to meet business expectations, according to
The Hackett Group’s research. These priorities are: enable
corporate sustainability; accelerate digital transformation;
improve analytical, modeling, and reporting capabilities; align
skills and talent with changing business needs; and improve
procurement agility. If procurement cannot overcome challenges in
these areas, it may be difficult to address critical priorities
such as supply risk objectives, the research found.
Operational Efficiency Remains Critical
– Procurement workload is expected to increase by 11.4% in
2022, the research found. But no increase is expected in staffing,
and a reduction is expected in budget, creating large productivity
and efficiency gaps that must be overcome, in part through the use
of technology.
Talent and Skills Challenges – The
efficiency gap, when combined with escalating salaries in
procurement and the unprecedented turnover levels driven by the
pandemic, will put great pressure on procurement organizations
seeking to become better strategic advisors to the business and
deliver on other priorities, according to The Hackett Group’s
research. Procurement organizations must develop specific offensive
(acquisition) and defensive (talent retention and development)
strategies to mitigate these issues, close skills gaps in key areas
such as leadership, data analytics and more.
Concerns Over Pandemic Fallout Continue
– The pandemic has cast a long shadow and is causing increased
concern in procurement over supply chain disruption, inflation,
commodity price volatility, and the “Great Resignation” which is
driving limitations from structural shortages of labor capacity and
skills, the research found.
The Hackett Group’s 2022 Key Issues research is based on results
gathered from more than 250 executives in procurement, finance,
supply chain, HR, technology, and global business services at a
global set of midsized and large enterprises.
About The Hackett Group
The Hackett Group, Inc. (NASDAQ: HCKT) is an intellectual
property-based strategic consultancy and leading enterprise
benchmarking firm to global companies, offering digital
transformation, including implementation of leading enterprise
cloud applications, workflow automation and analytics that enable
Digital World Class™ performance.
Drawing from our unparalleled IP from nearly 20,000 benchmark
studies with the world’s leading businesses – including 97% of the
Dow Jones Industrials, 94% of the Fortune 100, 70% of the DAX 30
and 51% of the FTSE 100 – captured through our leading benchmarking
platform, Quantum Leap® and our Digital Transformation Platform
(DTP), we accelerate best-practice implementations.
More information on The Hackett Group is available at:
www.thehackettgroup.com, info@thehackettgroup.com, or by calling
(770) 225-3600.
The Hackett Group, quadrant logo, World Class Defined and
Enabled, and Quantum Leap are the registered marks of The Hackett
Group.
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Gary Baker, Global Communications Director - (917) 796-2391 or
gbaker@thehackettgroup.com
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