6 Procurement Priorities for 2023-24: The View From Halfway Down

“You’re flying now

You see things much more clear than from the ground

It’s all okay, it would be

Were you not now halfway down”

In the critically acclaimed TV show about a world where anthropomorphic animals & humans coexist – BoJack Horseman – Secretariat (yes, the Triple Crown-winning horse!) delivers a haunting monologue toward the end of the show, titled ‘A View From Halfway Down,’ an excerpt of which has been quoted at the start of this blog. While in the show, the lines have a grim context, we can choose to look at it as a warning for us; a chance to take a breath and reflect.

The lines remind us of the unpredictability of life, and that while hindsight can be 20/20, actions & decisions have consequences. Just as Secretariat stood at the precipice of existence, Chief Procurement Officers (CPOs) find themselves halfway down the road in 2023, examining the results of their decisions at the start of the year, wondering if they should’ve done things differently. Unlike Secretariat, CPOs have the luxury of time & reconsideration, however fleeting that may be.

In this blog, we reflect on issues faced by CPOs, and determine six procurement priorities to focus on, to overcome said issues, and get on the path to consistent performance.

Procurement Priorities for CPOs to Lead Success in 2023 and Beyond:

1. Procurement Transformation: Unleashing the Power of Change

It’s too late to be debating the need for or the best time for procurement transformations. The cost of forgoing transformations and doing things ‘the old way’ is no longer viable. Procurement transformation has become a top priority as businesses strive to adapt to evolving market requirements.

Leading analysts agree, with several placing ‘procurement transformation’ in the Top 5 procurement priorities, albeit in varying positions. For an organization still clinging to analog processes, it is easy to demonstrate the ROI for digitalization, especially across the entire S2P process, with a single suite of products.

CPOs must lead the charge in transforming procurement practices to meet the evolving business landscape. Embrace technology, streamline processes, and foster an innovative culture to drive operational efficiency and deliver strategic value.
Check out our eBook- The Cost of Delayed Procurement Transformation

2. Cognitive Overload: Finding Clarity Amidst the Chaos

On average, procurement professionals make several dozen decisions every day, factoring in multiple complex systems, actions, and their consequences. For a CPO, that figure is likely to be exponentially higher.

This problem is not exclusive to procurement professionals, but it plagues them all the same. Repeated exposure to vast amounts of data and being asked to make high-stakes decisions strain our minds. This leads to a cognitive overload, as Gartner describes it.

It’s important to recognize it and take steps to lighten procurement professionals’ loads. Prioritize strategies that address cognitive overload, such as

1. Leveraging advanced analytics and AI tools,
2. Implementing effective delegation, and
3. Adopting streamlined processes for clarity and improved outcomes.

3. Harnessing the Power of Artificial Intelligence (AI): Revolutionizing Procurement Transformation Best Practices

Since OpenAI’s first release of ChatGPT in November 2022, the world has been smitten with AI. Below is a Google Trends chart that shows the meteoric rise in interest and engagement with AI worldwide since that initial spike in late 2022.

In procurement, you’d think many organizations are just now making the jump from analog to digital. And you would be right. But compare yourselves to industry leaders & early adopters – the visionaries. A small minority of organizations have adopted AI – real AI – in their procurement processes and are already witnessing exponential benefits. Learn more about their successes, and how you can join the upper echelons here.

Also check our whitepaper: Artificial Intelligence use cases- Identifying and realizing the real value

4. Addressing Supply Shortfalls: Building Bridges for Sustainable Partnerships

Organizations that haven’t yet reconfigured their supply chains, especially their key suppliers, must do so immediately to ensure minimum disruptions. At a time when most organizations have hurdled the procurement challenges in their path, it’s to one’s own detriment to stretch this problem further.

There is an emerging trend of composability & modularity that advocates for a tensile yet malleable supply chain – create & manage your supply chain in a way that allows you to quickly adapt to circumstances and arrange for alternate suppliers/supplies.

Learn more about composability & its importance to procurement tech here. However, this does not imply taking suppliers for granted.

Nurturing strong and sustainable relationships with suppliers is key to procurement success. Develop collaborative partnerships, foster open communication, and establish effective performance management systems to ensure supplier reliability, quality, and innovation.

Press release – Horizon October 2021 : Virtual Edition of Zycus Flagship Event

5. Driving Cost Savings and Value Creation: A Strategic Imperative

Achieving cost savings while delivering value is a perpetual goal for procurement. However, recent events have demanded most of our attention on capitalizing on every available savings opportunity while delivering value fell by the wayside.

Now that things have stabilized, it is time to refocus on maximizing procurement’s contributions. Implement a project management approach to new strategic initiatives started to achieve this objective. Leverage strategic sourcing best practices, onboard a data analytics suite, and adopt Total Cost of Ownership (TCO) models to optimize procurement spend and generate tangible value for the organization.

Inform product strategy by analyzing & interpreting supply trend information, employing intelligent buying & negotiation practices, and facilitating New Product Development (NPD) with key suppliers.

Also Read: The Stages of Strategic eSourcing: A Comprehensive Guide

6. Ensuring Compliance and Ethical Sourcing: Upholding Responsibility

Compliance and ethical sourcing practices are paramount in today’s business landscape. Establish robust procurement policies, conduct due diligence on suppliers, and promote responsible practices. Uphold regulatory requirements and ethical standards, ensuring transparency and sustainability throughout the supply chain.

Embrace ESG parameters as part of your long-term vision, and imbibe it into organizational culture, for maximum adoption. Organizations must prepare for changing needs of not just businesses, but their workforce as well.

Press release – Horizon 2021 – Zycus recognizes the unsung heroes of procurement

Achieving Excellence: The Hackett Group’s Story with Zycus Generative AI

Witness The Hackett Group’s journey toward achieving excellence in procurement. This video highlights their strategic use of Zycus Generative AI to overcome obstacles and set new benchmarks in the industry.See Their Journey – Click to Watch!

Conclusion

At Zycus, we are committed to helping procurement and supply chain professionals achieve breakthrough performance through cutting-edge technologies and innovative solutions. Whether you’re looking to build more agile supply chains, manage your risk more effectively, or enhance your supply chain analytics capabilities, our team is here to help. So why wait? Get in touch with us today to learn more about how we can help your business thrive in the years ahead!

Related Read:

1. Procurement automation: How can it help in procurement transformation? 
2. Understanding Blockchain in Procurement and Its Impact  
3. Change Management in Procurement and How to Handle It 
4. Procurement vs Purchasing– Understanding the Difference 
5. Procurement in Value Chain for Business Advantage 
6. White Paper – Unraveling Cognitive Procurement: Unlocking Efficiency With AI
7. White Paper – The 11 Most Important KPIs to Unlock Sustained Procurement Performance in 2023
8. Analyst-report- The CFO’s view of Procurement: Work in Progress – Benchmark Report
9. Whitepaper – Procurement Experts Outlook 2021 and Beyond
10. Press release – Zycus is back with its Annual Research Report ‘Pulse of Procurement’
11. Research Report – Pulse of Procurement 2019 – Part 2