Digital Transformation Key to Bridging
Productivity and Efficiency Gaps
Ensuring supply continuity and combatting inflationary price
increases are the top two priorities for procurement organizations
in 2023, while talent management has jumped to the top of
procurement’s list of planned improvement initiatives, according to
new CPO Agenda research from The Hackett Group, Inc. (NASDAQ:
HCKT). But strategic priorities are driving procurement’s continued
focus on reducing spend cost, and pursuing digital transformation
remain critical, along with improving analytics and insight
capabilities.
Talent management is the No. 1 planned improvement initiative
for procurement organizations in 2023, The Hackett Group® found.
But it was surprisingly absent from procurement’s list of top
priorities for 2023, in part because executives view talent
management as a relatively mature capability. Several other
priority improvement initiatives show lower maturity levels,
including supplier relationship management, responsible
procurement, third-party risk management, core procurement
technology enablement and supplier performance management.
Procurement organizations will also need to find ways to do more
with less in 2023, according to the research. An expected 10.6%
increase in workload, combined with smaller increases in
procurement staffing and budgets, will drive a productivity gap of
7.4% and an efficiency gap of 7.8%. An increase in technology spend
of 5.7% indicates a growing reliance on technology to increase
procurement productivity, efficiency and effectiveness.
Procurement organizations have a high level of adoption of
end-to-end and core procurement technologies, the research found,
and projected growth rates are also high. Large-scale deployment of
some technologies is still limited, but there is an exciting level
of piloting for supplier risk and performance management tools, as
well as tail spend management solutions. Procurement leaders are
also recognizing that success requires a data- and insight-driven
approach, with technology as a key enabler. Nearly one-half of all
companies surveyed have large-scale deployments of spend analytics
tools in place, and another 44% have pilots. Spend analytics is
also among the technology areas with the highest growth rates for
2023, the research found.
A complimentary version of The Hackett Group’s 2023 CPO Agenda
research is available, with registration, at
https://www.thehackettgroup.com/insights/2023-procurement-key-issues-2301/.
“We’ve seen a reordering of priorities in terms of procurement
strategy for 2023,” said The Hackett Group Senior Research
Director, Procurement and Procure-to-Pay Advisory, Amy Hillcox.
“Ensuring supply continuity -- the top priority -- is even more of
a focus than it was two years ago at the outset of the pandemic, in
part because of geopolitical turmoil and other disruptions.
Combatting inflationary pressures has soared to the No. 2 spot,
which is to be expected.”
According to The Hackett Group Principal and Global Procurement
Advisory Practice Leader Chris Sawchuk, “The biggest surprise for
2023 is that talent management isn’t in the top 10, which it has
been for several years. Talent should be a foundational element for
many of the things that procurement leaders are trying to
accomplish. But for 2023, it’s fallen off the top 10 list, in part
due to the current and difficult economic environment, as well as
the perception that it’s a fairly mature capability. Even with
that, the number of organizations with talent management
improvement initiatives planned in 2023 exceed the number focused
on all other areas.
“Reducing spend cost not only remains a core priority for
procurement, but will be elevated further in 2023 as procurement
organizations aggressively pursue opportunities to claw back cost
increases that have occurred in the last couple of years,” said
Sawchuk. “But more and more, procurement organizations will also be
looking to augment their cost savings initiatives to create broader
value and true competitive advantage for their companies. To do
this, procurement organizations must build effective capabilities
for continuous data acquisition and advanced analytics to provide
both predictive and prescriptive insight and intelligence.”
The Hackett Group’s 2023 Key Issues research is based on results
gathered from more than 350 executives in finance, procurement,
supply chain, human resources, information technology, and global
business services at a global set of midsized and large
enterprises.
About The Hackett Group
The Hackett Group, Inc. (NASDAQ: HCKT) is a leading
benchmarking, research advisory and strategic consultancy firm that
enables organizations to achieve Digital World Class™
performance.
Drawing upon our unparalleled intellectual property from more
than 25,000 benchmark studies and our Hackett-Certified® best
practices repository from the world’s leading businesses –
including 97% of the Dow Jones Industrials, 93% of the Fortune 100,
73% of the DAX 30 and 52% of the FTSE 100 – captured through our
leading benchmarking platform, Quantum Leap® and our Digital
Transformation Platform, we accelerate digital transformations,
including enterprise cloud implementations.
For more information on The Hackett Group: visit
www.thehackettgroup.com; email info@thehackettgroup.com; or call
(770) 225-3600.
The Hackett Group, Hackett-Certified, quadrant logo, World Class
Defined and Enabled, Quantum Leap and Digital Excelleration are the
registered marks of The Hackett Group.
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Statements
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meaning of Section 27A of the Securities Act of 1933 as amended and
Section 21E of the Securities Exchange Act of 1934, as amended.
Statements including without limitation, words such as “expects,”
“anticipates,” “intends,” “plans,” “believes,” seeks,” “estimates,”
or other similar phrases or variations of such words or similar
expressions indicating, present or future anticipated or expected
occurrences or outcomes are intended to identify such
forward-looking statements. Forward-looking statements are not
statements of historical fact and involve known and unknown risks,
uncertainties and other factors that may cause the Company’s actual
results, performance or achievements to be materially different
from the results, performance or achievements expressed or implied
by the forward-looking statements. Factors that may impact such
forward-looking statements include without limitation, the ability
of The Hackett Group to effectively market its digital
transformation and other consulting services, competition from
other consulting and technology companies that may have or develop
in the future, similar offerings, the commercial viability of The
Hackett Group and its services as well as other risk detailed in
The Hackett Group’s reports filed with the United States Securities
and Exchange Commission. The Hackett Group does not undertake any
duty to update this release or any forward-looking statements
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version on businesswire.com: https://www.businesswire.com/news/home/20230316005054/en/
Gary Baker, Global Communications Director (917) 796-2391 or
gbaker@thehackettgroup.com
Hackett (NASDAQ:HCKT)
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