Senior leaders in procurement organizations often find themselves reacting to a barrage of activities coming their way in sequence, much like the protagonist of the famous 1980s video game Pac-Man eats his way through the maze while dodging ghosts.
With the speed at which technological innovations are accelerating, coupled with the increasing frequency and complexity of legislation, organizations have little to no time to assess and differentiate between threats and opportunities. And just like Pac-Man, they often end up reacting to all these events with limited time, budgets, and attention.
There is a compelling need for procurement functions within organizations to evolve into “value ninjas” to keep up with the increasing speed and complexity of the business world around them and outsmart the ghosts.
Wading through the maze
Based on a study by SAP with over 630 customers, 52% of the procurement organization’s time is spent on transactional activities.
A typical procurement leadership team has to deal with making decisions relating to developing a procurement strategy, meeting spend-management targets, maintaining and expanding relationships with suppliers, sourcing responsibly, and compliance and governance. All of that is against a backdrop of changing legislation, mergers and acquisitions, new product development, competitor movements, and the need to prepare for emerging technologies such as blockchain, AI, and machine learning – to name a few. Each of these decisions comes at a cost.
Two recent examples come to mind. Many service organizations were taken by surprise when they realized that Sweden’s chemical taxation (known as Kemikalieskatt) was applicable to them as well; it wasn’t limited to the manufacturers of electronic goods that contain bromine, chlorine, or phosphorus compounds. Another good example relates to the panic and confusion that GDPR has caused, as companies recognized that their customers’ and consumers’ personal information is scattered across numerous legacy systems.
To embrace, fight, or ignore?
A procurement value ninja is self-aware of her own organization in terms of strengths and limitations. She can look ahead and anticipate in real time whether what’s coming her way is an opportunity to embrace, a threat to fight, or something to entirely ignore, and prepare accordingly. She is equipped with insights and a strong toolbox of methodologies to craft effective business models, processes, and the right levels of automation and digitalization and to design the talent pool required to execute her roadmap.