Strategic procurement challenges


Unveiling the Landscape of Strategic Procurement Challenges: Early Insights from the 2023 Future Purchasing Global Study

By Paras Sood |

In today’s dynamic business environment, effective procurement strategies have never been more critical. Category management, supplier management and business partnering – the core tenets of strategic procurement – have gained prominence as organisations seek to optimise their supply chains and deliver value. The complexities surrounding strategic procurement are everchanging and successful implementations are dependent on a better grasp of volatility, uncertainty, complexity and ambiguity (VUCA). The 2023 Future Purchasing Global Study, conducted in partnership with Henley Business School, delves into the intricacies of strategic procurement and category management and unveils the challenges faced by organisations worldwide.

The power of strategic procurement

Strategic Procurement isn’t just another catchphrase; it’s a comprehensive business strategy that encompasses category management, supply chain resilience, supplier management, risk mitigation, cost reduction, and value creation. The ongoing study underscores the significance of strategic procurement as Chief Procurement Officers and Chief Commercial Officers seek to align procurement goals with overall business objectives.

Diverse challenges, shared concerns

As the study progresses, organisations are sharing their experiences, highlighting a tapestry of challenges faced as they embark on or refine their category management journeys. These challenges can be broadly categorised into several key areas:

  1. Resource constraints and expertise:
    Across industries, organisations cite resource limitations as a significant impediment. The lack of skilled professionals, formal processes, and adequate tools hampers efficient strategic procurement. Training, reskilling and upskilling emerge as key initiatives to bridge this gap.
  2. Stakeholder engagement and alignment:
    Strategic procurement’s success hinges on stakeholder engagement and buy-in. Early survey responses to the ongoing study highlight the challenge of aligning diverse stakeholders, fostering commitment, and educating them about the benefits of category management.
  3. Technology and data challenges:
    In the era of data-driven decision-making, organisations encounter challenges related to technology adoption, data integration, and access to real-time market insights. These hurdles reaffirm the need for agile technology solutions and streamlined data management.
  4. Socio-economic and market factors:
    Price volatility, inflation, and supply chain disruptions present formidable challenges. Organisations must navigate these uncertainties while optimising costs, managing risks, and aligning with sustainability goals.
  5. Organisational culture and understanding:
    Incorporating strategic procurement into an organisation’s culture requires change management and education. Early insights from the survey emphasise the importance of integrating sustainability practices and enhancing understanding among stakeholders.
  6. Implementation and strategy development:
    Developing and embedding category, supplier and business strategies requires careful planning and execution. Ensuring alignment with stakeholder needs and maintaining an evolving strategy are key focal points.
  7. External factors:
    Geopolitical challenges, such as Brexit and global conflicts, impact supply chains and procurement strategies. Organisations must navigate these external forces while maintaining agility and adaptability.
  8. Challenges from business growth and acquisitions:
    Rapid business growth and acquisitions bring complexity. Onboarding new customers, harmonising processes, and managing increased supplier diversity are critical challenges to address.

Navigating the path forward

As the Future Purchasing Global Study progresses, organisations are actively sharing insights and exploring innovative solutions to address the identified concerns:

  • Investing in and reimagining talent: Upskilling procurement professionals and attracting skilled talent are crucial steps in overcoming resource constraints. More importantly, a ‘skills-shift’ also means a shift in job purpose for strategic procurement professionals.
  • Advancing stakeholder engagement practices: Collaborative efforts to educate stakeholders about the benefits of strategic procurement, whilst procurement professionals educate themselves on business needs, can foster alignment and commitment to category and supplier strategies.
  • Leveraging digital, data and the ‘future of work’: Embracing technology solutions that provide real-time market insights and streamline data management enhances business decision-making. This adoption also mirrors the hybrid, democratised ‘future of work’ for procurement professionals.
  • Integrating risk management with sustainability: Integrating risk assessment and sustainability considerations into category and supplier strategies ensures long-term success. Challenges still exist, however, in mapping interdependencies between risk, opportunity and ethical practices.
  • Proactively managing culture and change: Cultivating a culture of change and continuous improvement paves the way for effective strategic procurement integration. For instance, this may require developing supplier diversity and inclusion models that move beyond positive forms of discrimination.

Influence the future: Participate in the survey

The 2023 Future Purchasing Global Category Management Survey invites organisations to contribute their insights and challenges to this important conversation. Your participation will help shape the understanding of category management’s landscape and contribute to industry-wide improvements.

Upon completion, the survey’s findings will be compiled into a comprehensive report titled “Influence the Future.” This report will provide a valuable resource for organisations seeking to navigate the complexities of category management and drive strategic procurement success.

Participating in this study is an opportunity for advancing the profession and shaping the future of procurement, for your organisation and beyond.

Further reading

Blog post: 10 years of world leading actionable category management research

Blog post: Mark Webb explains the benefits of completing our category management survey

About Paras Sood

Paras looks after FP’s overall strategy and our private sector clients. Paras joined us from Deutsche Bank, where he led strategic procurement transformation globally after a career spanning Life Sciences, FMCG, Manufacturing, Raw Materials and the Public Sector in both industry and consulting roles.