Time for agile sourcing

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The current procurement climate of short-term goals and targets driven by the recession is raising questions over how much capacity organisations have to find lasting solutions to key issues, according to the latest survey of chief procurement officers by Capgemini.

More than half of international companies are targeting savings of five per cent or more and nearly seven in ten participants said the current economic recession was having a significant impact on them: increasing targets, altering focus areas and shortening planning time horizons.

“For many, savings targets have doubled from those that prevailed when we last conducted the Global CPO Survey, and in some cases are a clear requirement for survival,” Capgemini said.

The survey highlights a number of issues: unlocking the intrinsic value within IT solutions; shortage of talent; managing risk in the supplier base; low implementation of e-procurement tools; and continuing issues of spend visibility.

It is clear from the survey that the pressure on the procurement function is continuing to grow exponentially. “If anything the global financial crisis has only accelerated this focus as cost reduction becomes key to sustained profitability and in many cases long-term survival,” says Capgemini, arguing that the winners will be those that can show the agility to adjust rapidly to the challenges facing them.

It’s hard to argue with that – particularly as the market is showing signs of picking up and CPOs will face a whole new set of challenges.

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