More than 60% of Teams Collaborate with Finance and Others, but Data Gaps Hinder Procurement’s Untapped Potential to Drive True Value and Impact
Current economic pressures make procurement’s overall impact even more crucial for organizations, yet work remains to enhance the function’s operational efficiency and demonstrate its value, according to a joint survey by SpendHQ and Procurious. The report, From Insights to Impact: Driving High-Performance Procurement, offers insights on gaps in procurement performance and data management and how procurement can transform its reputation and drive true value and impact.
Ninety-one percent of large organizations report having a senior executive overseeing procurement performance. Additionally, 38% of procurement teams present their priorities to the C-suite for guidance and 25% set their own. But 75% of all respondents doubt the accuracy of the data they present with 73% of teams still tracking metrics with spreadsheets and other inefficient tools. Seventy-nine percent of non-procurement executives are either somewhat or not at all confident in using procurement data to make strategic decisions.
Procurement’s collaboration across enterprise departments is high, with 67% of respondents saying they collaborate with finance regularly or often, while 60% collaborate with supply chain and logistics, and IT and operations. But 43% never or rarely collaborate with manufacturing, while 39% never or rarely collaborate with sales and marketing.
“Procurement teams must do more to build and maintain influence within their organizations, including removing the dependency on spreadsheets to become more efficient,” said Pierre Laprée, chief product officer of SpendHQ. “By using the right technologies, such as spend intelligence and analytics, along with embracing procurement performance management as a general approach to enterprise collaboration, procurement can show finance and other key stakeholders reliable and indisputable data and become a trusted business partner.”
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Other survey takeaways include:
- Procurement reports on what it is best known for – savings. Sixty-three percent of teams present their performance directly to executive leadership, with 14% reporting to their board of directors. Negotiated savings (71%) and realized cost savings (71%) are the top two reported KPIs, followed by risk and continuity (53%), sustainability (43%) and supplier diversity (23%).
- The C-suite needs better visibility into procurement’s alignment with stakeholders. While procurement teams are roughly split on perceptions of how well their strategies align with their company’s overall vision (49% very aligned vs. 48% somewhat aligned), C-suite executives took a more positive view (56% vs. 41%).
- ESG data woes continue. Forty-six percent of procurement teams don’t have enough ESG diversity data, 39% say their data is disconnected from sourcing and spend decisions, and another 39% lack plans to use ESG data to improve outcomes (39%).
- Continuous procurement performance improvement is needed. Twenty-nine percent of teams have a sub-optimal approach for consolidating separate project tracking and reporting on a periodic basis, while 14% say they’re highly fragmented, decentralized, and inconsistent in their planning, tracking, and reporting.