Procurement’s New Top Priority

As noted in our news section, The Hackett Group’s latest procurement research contains some revealing new trends. Here’s what Global Managing Director and Procurement Advisory Practice Leader Chris Sawchuk found the most compelling:

It was fairly surprising to see that cost reduction fell to the fourth priority, after eight years in the top spot. Clearly, the priority of procurement for 2014 is to support innovation-driven revenue growth, and finding ways to enable that trumped the historic focus on cost reduction. We’ve been expecting to see this switch. But it’s surprising that it happened so abruptly, and in such a dramatic fashion.

In this context, it wasn’t that surprising to see that procurement’s top priority became expanding its scope and influence. After so many years of driving down costs in the same areas, the only way to continue to make progress is to expand into new areas.

It was also very interesting to see the focus on reinventing procurement’s value proposition. Procurement organizations are clearly getting the message that they need to demonstrate their value, in the same way they’ve documented spend savings for nearly a decade.

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