Tightening the Alignment between Procurement and Corporate LeadersProcurement
Tightening the Alignment between Procurement and Corporate Leaders
Using procurement as a catalyst for change
In a recent webinar with PricewaterhouseCoopers (PwC), we compared 3 different global studies where Procurement and C-level Management stakeholders addressed digitalization, risk, and ESG.
The results from PwC’s Digital Procurement Survey, The CEO Survey, and The Fraud Survey revealed surprising differences between Procurement top priorities versus Corporate Board Member goals.
Watch our Webinar Replay to find out more about the GAPS identified by PwC and some practical tips on how Procurement can take advantage of and help support changing C-level priorities.
CEOs Look to Innovation
The Digital Procurement Survey results established that Procurement’s priorities have shifted due in a post-COVID-19 world. Not surprisingly, risk management and cost reduction are considered the most important priorities for Procurement professionals (see image 1).
The majority of CEOs also expect increased energy and focus toward innovation, talent development ,and ESG. (see image 2).
Surprisingly, these topics rate lower in the Digital Procurement Survey, with a significant disconnect between Procurement leaders and CEO prioritization.
During the webinar, 51% of the respondents indicated that their company either did not have ESG on the radar or they were in the early discovery/development phase. 32% indicated that first initiatives were implemented, while the remaining 17% answered that many initiatives were implemented.
Therefore, you would expect that Procurement is ready to play an active role in managing supplier risk. Unfortunately, this is not the case. In fact, 50% of respondents lack a mature third-party risk program and 21% have no supplier due diligence or supplier monitoring program at all. Leaving themselves extremely exposed.
Risk Management is Top of Mind
Where do CEOs and CPOs see eye-to-eye? On the increased importance of managing risk. For example, 31% of CEOs believe it should be a top priority to collaborate with supply chain partners to collectively manage risk (see image 3).
CEO Risk Management Priorities
Expanded focus on risk management is a relevant priority as dependence on suppliers will inevitably increase a company’s exposure to supplier risk. Managing your supplier risk is crucial to combating bribery, corruption, procurement fraud, and other corporate risks that often occur as the Fraud Survey revealed (see image 4).
Main Corporate Risks
From this data, you may infer that Procurement is ready to play an active role in managing supplier risk. Unfortunately, 50% of respondents lack a mature third-party risk program and 21% have no supplier due-diligence or supplier monitoring program.
Catalyst for Change
Merging CEO expectations with Procurement team priorities will offer some clear opportunities for CPOs. To meet corporate expectations and align priorities, CPOs should focus on:
- The digitization of procurement processes
- Strengthening/initiating supplier risk management activities
- Embedding ESG into the Procurement processes and strategy
- Balancing the drive for cost-efficiency with the need to innovate.
Procurement teams have a unique and powerful position to manage risk and optimize the client-supplier relationship. With the right tools and support from Ivalua, Procurement can be your organization’s facilitator of change.