Nearly 75% of procurement organizations are not implementing advanced risk programs, primarily due to gaps in data and analytics, and only 7% of organizations have mature third-party risk performance management (TPRM) systems in place, according to the “From Insight to Impact: Analytics-Led Third-Party Risk Performance Management" report released by ProcureAbility, a Jabil company, in collaboration with The Hackett Group.
“Procurement leaders pulling ahead are replacing fragmented management of risk, cost, and performance with a unified operating model that integrates strategy, governance, and analytics,” says Darshan Deshmukh, president of ProcureAbility.
Key takeaways:
· Many procurement organizations only have a foundation for TPRM and lack the tools and processes to successfully deploy the program. The report finds that 75% of procurement organizations are not implementing advanced risk programs, primarily due to gaps in data and analytics.
· 62% report that a mature supply risk management approach is only partially deployed due to limited development of practices, processes, or systems.
· 13% report that there is no formal approach to supply risk management.
· Although 90% of these organizations are monitoring supplier risks (financial, location, etc.), only 7% of them are modeling future disruption scenarios.
· Organizations are finding that only monitoring supplier risks keeps them in a constant state of reacting instead of predicting future disruptions.
· 68% of procurement organizations cite supply chain disruptions (geopolitical tensions, trade policy shifts, chokepoint disruptions) as the top challenge to stabilizing out of a constant state of permacrisis.
· The organizations pulling ahead are treating risk management and analytics as a single, integrated capability that converts supplier signals into faster, better commercial decisions.
