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We can all agree that 2020 was a most interesting year. Switching to remote work challenged the best of us. Balancing professional responsibilities with the demands of family life (virtual schooling, anyone?) required infinite skill, flexibility, and patience. So far, 2021 is not letting up much. But that doesn't mean we can forgo the importance of achieving our business objectives. Instead, we need to get creative and thoughtfully plan out our priorities.
Recently, our team joined a webinar with Fairmarkit that brought together several procurement thought leaders to discuss how they are handling their investments and priorities in 2021.
To launch the conversation, we shared a sneak peek at some results of the Procurement Pulse Check: Top Priorities for 2021, a survey of more than 100 procurement professionals conducted by ProcureCon and WNS Denali. During the webinar, we shared a few key insights:
84% of CPOs are prioritizing stakeholder alignment,
52% say managing tail spend will be a focus, and
83% report talent management will be a key emphasis.
These findings are consistent with the priorities identified by the webinar participants, which included Applied Materials’s Ann Fleishell, Fairmarkit’s Kevin Frechette, Snowflake’s Joe Frederick, Atlassian’s Karen Webley, and WNS Denali’s Tina Yoder. The focus for these leaders -- and most procurement practitioners -- includes rethinking their talent, applying enabling technology, and changing their operating model to free up capacity for their teams to make more strategic contributions to the business.
Of course, where procurement executives choose to make progress differs greatly based on their own unique procurement ecosystems. Yet, most are intent on addressing stakeholder alignment, controlling tail spend, and optimizing talent management in the year ahead. Let’s dive deeper into each of these three areas below.
The Covid-19 pandemic changed a lot about stakeholder relationships. Procurement executives pivoted to more creative solutions that empowered them to build and maintain connections. CPOs quickly learned how to establish and build relationships remotely. With everyone pressed for time, crisp messaging and communication became more important than ever. Some helpful tactics to improve your stakeholder alignment in 2021 include:
Conducting internal customer satisfaction surveys and reporting on the results with a detailed action plan for improvements
Publishing internal blog posts that share success stories and tips for working with procurement
Hosting forums to collect real-time feedback from your customers
Using messaging apps or chat bots to offer relief from conference calls
These efforts will remain a top priority in 2021 as moving procurement’s brand toward true strategic partnership requires strong stakeholder relationships built meeting by meeting, deal by deal, and success by success.
In most cases, tail spend accounts for roughly 80% of an organization’s transactions and 20% of total spend volume, yet many times these transactions are thought to be too small to go through procurement. The challenge to getting a handle on tail spend is often one of time and resources, according to the webinar participants. I get it, there are often other priorities that loom larger. But getting tail spend under management doesn’t have to be done all at once. One solution employed by WNS Denali client Merck Group was to start with one category, one site at a time. Success required strong stakeholder relationships, communications and change management. After realizing $1.5 million in savings in the first few months with just one site, the stage was set to incorporate other categories and sites.
The end goal is not just cost savings, though. Properly managing tail spend has implications for turn-around time and requisitions. Understanding who the vendors are that account for 80% of transactions is also important for risk management. The good news is that once tail spend is automated, it doesn’t need much strategy to continue. As a result, this effort frees up the procurement team’s time to focus on more strategic priorities. And saving money helps build the stakeholder trust and relationships necessary to tackle more high-stakes spend.
According to our survey results, 63% of CPOs at large organizations agreed “we need to do more” to build talent and increase capabilities. The webinar panelists were in total agreement that talent management is a top priority for 2021, noting that skillsets have evolved during the past 20 years. Procurement professionals used to be very transactional. In previous years, most of the work was about finding a supplier with the best price and making the purchase. Today, as the transaction side is becoming increasingly automated, more soft skills are needed to build relationships and trust with key stakeholders.
In 2021, it’s imperative that procurement professionals have an appropriate amount of business acumen. They need to understand the business and the role procurement plays in achieving the larger business objectives, not just be able to negotiate the best price. Identifying and developing talent will continue to be a challenge in 2021 as the workplace remains largely virtual for the foreseeable future.
Webinar participants noted that procurement leaders should be mindful of the need to be more organized and thoughtful as they plan for ways to develop their people. And it can’t be all about work. Retaining and developing people in these new times will require more empathy and self-awareness. As Ann Fleishell noted during the webinar, procurement executives should model self-care and boundaries to give people the time and space they need to rejuvenate away from the office, which is now often just down the hall from one’s personal living space.
As the saying goes, when everything is a priority, nothing is a priority. When planning out the year ahead, it’s imperative that you know where you’ve been and where you want to go. Develop (or revisit) your multi-year roadmap and build in realistic, insightful metrics to tell you when you are on the right path, or when you might need to try another avenue. Sign-up for early access to the results of our survey and hear how other CPOs are charting their course in 2021.
Senior Vice President, Sales
Greg Anderson is Senior Vice President of Sales in North America at WNS-Denali. He is a proven expert in Supply Chain and Procurement Managed Services and Technology solutions. Greg has over two decades of cross-industry sales and marketing leadership experience. Prior to WNS, Greg held leadership positions at Ivalua, Pensiamo, Directworks, Tenzing Consulting, SmartOps, Ariba, FreeMarkets, GE, and PPG.