During the recent Webinar ‘Real-time Procurement Benchmarking: Insights into Key Issues & KPIs for 2014 & beyond’ held on Dec 12, 2013, in association with ISM, The Hackett Group &  Zycus, a small survey was held among the 861 procurement professionals who attended the webinar. This survey was aimed at understanding the business/procurement objectives and challenges anticipated by the webinar attendees in the year 2014. The survey results can be seen in this info-graphic: Driving Down the Procurement 2014 Lane.

Procurement Objectives for 2014

1. Improving Profits

The top two enterprise objectives for 2014 among procurement professionals are to achieve better Revenue Growth (40.9%) and to Improve Profit Margins (44.2%).

With an objective to improve margins, it is important that procurement focuses on identifying savings opportunities by developing visibility into the direct and indirect spend of the organization. One of the prevalent cost factors in most businesses is purchased goods and services. Reducing the costs of purchased goods and services has a direct impact on a company’s profit. 60% of the procurement professionals revealed that reduction and avoidance of purchasing cost are the top two procurement-related issues that need to be addressed in 2014.

The survey results also revealed that at present less than 40% of the indirect spend is formally influenced by the procurement professionals as against 97% for World Class Companies, according to the Hackett Group. The other critical procurement issue that needs to be addressed in 2014, according to 45% of the procurement professionals, is expanding awareness of the importance of procurement and its influence on the bottom line.

These issues may be addressed by adopting the following Process:

• Investing in Skilled Professionals: Investing in skilled professionals with strong negotiation skills and overall knowledge of the industry, the raw materials cost and suppliers’ capabilities can enable procurement to master the negotiations and get best deals for the organization from suppliers.
• Leveraging Procurement Automation: Technology can enable higher visibility and control over different facets of the procurement process, such as: sourcing activity, supplier evaluation and selection, contract terms compliance, overall spend etc., thus enabling timely identification of bottlenecks and savings opportunities and the taking of prompt measures accordingly.

For achieving high visibility and identifying greater savings opportunities, best-in-class procurement organizations are leveraging procurement automation by implementing a spend analysis solution. A spend analysis solution facilitates sourcing performance, reduces maverick spend, increases compliance and generates savings. Spend Analysis features expand the performance-improvement horizon by:

• Embedding spend data classification into real- time buying processes
• Automating and accelerating identification of savings opportunities
• Synthesizing spend data with global market intelligence to inform competitive sourcing and supply management strategies

To learn about the Zycus’ Spend Analysis Solution, Click Here