At the Economist Procurement Conference in Chicago, I picked up a number of insightful statistics from a recent report, The New Face of Purchasing, issued by the Economist Intelligence Unit earlier this year. Some of the key findings of the report follow below. First, the procurement function continues to have a "low reputation" globally. 19% of respondents called it a strategic activity, while only 3% said that it’s a fast track to senior management, and only 4% said that it’s respected by internal stakeholders. According to the study, this is because procurement is:
- Still focused on a short-term reactive approach
- Focused on price, not cost
- Limited by a dearth of qualified staff and information that hinder the function's ability to be strategic
However, there’s a bit of good news as well. According to the study, competitive pressures will force executives to re-evaluate the function in the coming years. For example in "the next 10 years, the function will be significantly elevated" and "34% of respondents said that procurement executives will play a critical role in setting strategy" for organizations in the future. While even these numbers are not as high as I'd like to see, at least they're an improvement. And we should also remember that the Economist research was based on a global sample, rather than North America, which is at least 1-2 years ahead of other regions in Spend Management innovation (my estimate, not there's).