Ensuring supply continuity and combatting inflationary price increases are the Top 2 priorities for procurement in 2023, while talent management jumped to the top of procurement’s list of planned improvement initiatives, according new CPO Agenda research from The Hackett Group, Inc. But strategic priorities are driving procurement’s continued focus on reducing spend cost, and pursuing digital transformation and improving analytics and insight capabilities remain critical.
“We’ve seen a reordering of priorities in terms of procurement strategy for 2023,” says Amy Hillcox, senior research director, procurement and procure-to-pay advisory, The Hackett Group. “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.”
From The Hackett Group:
- Talent management was the No. 1 planned improvement initiative for procurement in 2023. 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 will also need to find ways to do more with less in 2023. 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%.
- Nearly 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.
“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,” says Chris Sawchuk, principal and global procurement advisory practice leader, The Hackett Group.