Secret diary: a sneak preview into the 6 challenges facing procurement managers today
- 21 Apr 2017
- Best Practice & Strategies
We asked 200 senior business management and procurement professionals at fast-growth mid-sized UK businesses about the pain points their department has experienced as their organization has grown. Based on the research findings we’ve created a series of six fictional secret diary extracts from an overworked and under-resourced procurement hero.
We all know that as businesses try to meet their growth targets, they face roadblocks along the journey, with procurement often being thrown into the spotlight as both a growth barrier and an enabler. So, we recently asked 200 senior business management and procurement professionals about the challenges their procurement department has experienced whilst their organization has grown. Based on these findings we’ve created a series of six fictional diary extracts from an overworked and under-resourced procurement manager (there’s plenty of you out there, you know who you are!), each one reflecting a common pain point identified from our real-world study. With demands mounting to resolve issues in cost reduction, supplier management, spend analysis, and spend control our procurement manager’s ‘to do’ list keeps mounting up! Whilst the CEO has aspirations to double in size with plans for new products, new funding and acquiring a competitor, the Finance Director is fighting for spend control and visibility whilst the Compliance Manager is asking for evidence of responsible sourcing practice. Meanwhile, Accounts Payable are at breaking point chasing and resolving a mountain of invoice queries, whilst goodwill is evaporating at an alarming rate with key suppliers. In these diary entries, you’ll probably recognize some familiar scenarios play out, with various hot potatoes landing on the desk of our plucky procurement hero. Accompanying each diary entry are some more of the growing pain facts revealed by our research, as well as suggested solution ideas and case study examples from our customers who have experienced (and conquered!) similar issues.
So, what are the 6 growing pains found in the ‘Secret diary of an overworked procurement manager’?
- Growing Pain 1 - Managing rising costs: our procurement manager’s organisation is struggling with rising costs against income, and ultimately protecting profitability. The Finance Director wants to be more proactive on managing supplier contracts on cost and performance, but a lack of a system is a huge hindrance. Did you know? Our research found that 83% of businesses don't challenge suppliers on cost or performance
- Growing Pain 2 – Outgrowing your supplier base: Sourcing new innovative suppliers to support a product development initiative is proving difficult for our procurement manager without a robust and speedy way to evaluate potential new supply partners. Did you know? Our research found 79% of businesses are not driving innovation in supplier relationships and that existing suppliers are not up to the growth challenge.
- Growing Pain 3 – Ineffective supplier management: supplier information and supplier relationship management is clearly a problem for our procurement manager. With a disengaged supplier disputing incorrectly specified components and prompt payment discounts being withdrawn. Did you know? Our research found that 44% of businesses want to manage suppliers more effectively
- Growing Pain 4 – Little control over spending: a lack of compliance with using approved suppliers seems to be commonplace, with a complete culture - and system - change required to rest back some visibility of spend. Coupled with a Board request to provide a detailed spend breakdown on a recent project only re-enforces the need for change Did you know? In our research 39% of businesses said they need to improve their budgeting controls right now. Take our Spend Culture Quiz to find out what your business can do to improve its spend culture
- Growing pain 5 – Inadequate systems: with manual home-grown purchasing processes no longer up to the job, Accounts Payable are struggling to stay on top of processing and paying invoices. For our procurement manager, it means key suppliers delaying delivery, and customer orders in jeopardy Did you know? Our research found that 87% of businesses have too complex and resource-heavy procurement processes
- Growing pain 6 – Poorly equipped for investment or acquisitions: if like our procurement manager your organisation has new external funding on the cards, you could be struggling to meet the investor’s due diligence requests Did you know? In our research 74% of businesses said they would struggle with providing the due diligence on spend reporting
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