Supplier management might be the most important area that procurement leaders need to focus on in preparation for the next economic disruption, says Ryan Polk, director analyst, procurement advisory with Gartner.
There are so many things that procurement leaders could be concerned with today, but stakeholder pressure requires a focus beyond cost, quality and speed, Polk says. “Our traditional value propositions are things like managing risk, cyber security, innovation, sustainability, diversity, equity and inclusion,” he says. “Now, how do we simultaneously narrow our focus on the right things? The answer is material to our success. Regardless of what bubbles up to the top of your material concern list, it's likely that two things will become more important for the procurement leader now and into the future. And that's category management and supplier management.”
Polk says category management is “almost” the operating model of the future for leading procurement organizations. “You'll see decisions that used to be made at the indirect or direct level increasingly being made at the category of spend level, in a world of myriad stakeholder concerns.”
Supplier management is the most effective way to deliver on emerging stakeholder concerns and priorities, he says. “You think about sustainability, diversity, equity and inclusion, cyber risk and managing supply chain disruptions. All are more effectively achieved through post-contract-award supplier management than they are, say, through pre-award sourcing.”
Procurement professionals are asked to become more strategic, Polk says, but data literacy and digital dexterity are inadequate. He also feels there is a “decent” level of technology maturity in many companies, but users can’t maximize what they have. “It feels like the person who buys the latest and greatest golf clubs every year but never works on their swing. We have the best technology, but do we know how to use it?”
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