What’s your Procurement Agenda? Asia Edition PART 2
In our previous post, we explored how The Hackett Group has come out with a comprehensive Procurement Agenda for 2015 and we looked at major areas of procurement focus along with the top priorities. Today, let’s move ahead and see what else is in store for Asian Procurement Professionals:
Budgets allocated for 2015
While increasing productivity and efficiency is the key, a whopping 60% of professionals say that their operational budgets will stay flat or decline. What’s more surprising is the expected increase in budgets is a scant 0.3%. Considering the Asian recession in the recent past, procurement as a function seems to have fared better than its counterparts; as the other functions had to see sharper declines in their operating budgets. Doing more from less is the mantra for 2015.
Robust Savings by end of 2015
84% of respondents forecast robust growth in terms of both cost reduction as well as cost avoidance with a gross savings contribution between 5% and 6%. With the global respondents predicting these numbers, Asian procurement teams can thus concentrate on being more aggressive towards their savings goals and less concerned over the budgets decline.
Broadening the influence of spend
Starting from 2015, procurement professionals will see a new trend of influencing indirect spend which will result into sustained or increased savings. Currently around two-thirds of organizations influence indirect spending upto 70%. Considering the fact that budgets will stay flat, Asian procurement professionals will have to use new operating models to achieve higher influence like putting in place 100% governance on policies, processes and so on.
In our next post we shall look at driving higher returns, supplier management strategies and what’s the bottom line for Procurement in 2015?
The Procurement Agenda 2015 report emerges from a recent joint survey conducted by Zycus and The Hackett Group. This survey, responded by over 200 procurement leaders and practitioners, reflects their growing determination to continue to drive sustained procurement savings and efficiency gains in the coming year.
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