Where are CPOs focusing their time, effort and investment this year? WNS Denali finds out

Procurement advisory and managed services provider, WNS Denali, has released the results of its “Procurement Pulse Check for 2021” benchmark survey which it carried out in conjunction with ProcureCon. The report looks into the strategies of CPOs for 2021 and where they intend to focus their time, effort and investment. Having surveyed more than 100 procurement executives (of which 60% hold global roles) from around the world and from varying industries, it shares the common themes from the data collected to give other senior procurement executives a benchmark as they face the months ahead.

They gathered CPO perspectives on the priorities in their organization today, the priorities in their organization for the future and the critical investment areas for the year ahead. They then asked respondents to rank these priorities across a number of initiatives, namely: strategic business alignment, digital transformation, operating model and talent. They found that:

• Stakeholder and business alignment: 64% are not aligned with the business
• Digitalization: 45% are not happy with the pace
• Operating Model: 58% have not fully segmented tactical from strategic work
• Talent: 49% say they need to do more

WNS Denali cross-referenced the data from this benchmark survey with first-hand client experiences and procurement leader perspectives to identify the biggest gaps for procurement organizations. Clearly, levels of maturity in the areas studied varied by organization, but certain broad themes that need addressing stood out (most are not surprising but it serves to have them rubber-stamped). Procurement needs to:

• Build closer alignment with business stakeholders to understand the additional value they can add, and to increase reach and impact
• Structure the organization in a way that allows team members to deliver the maximum impact possible through vision alignment and increased effectiveness
• Implement and optimize core digital enablers that will improve partnership with the business and increase efficiency

The report goes on to dig deeper into each of these imperatives, covering the current state of each and CPO intentions for them going forward.

Strategic business alignment

Taking the first one, strategic business alignment, as an example, it concludes that procurement organizations that integrate with core long-term business objectives outperform their short-term-focused peers. A business-aligned procurement team has a holistic approach to increase total business value, which includes cost, risk, innovation, user experience, supply assurance, time-to-market and compliance, among other drivers. Most survey respondents had not achieved this strategic alignment.

In fact, only 9% of respondents are satisfied with the current level of stakeholder alignment in their organization, however, it’s becoming a bigger trend and focus in the next year or so.

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The report is peppered with first-hand quotes from respondents relevant to that area, which really brings it to life. For example, Ann Fleishell, Head of Global General Procurement at Applied Materials says:

“I found that our organization, like many, was focused on savings, but it’s just as important to have a clear plan for customer relationship management (CRM) especially during a pandemic! As we made that pivot, our changes were around building trust, business alignment and establishing clear guidelines on what it means to partner as a procurement person. For example, this included defining how to listen, help, maximize our impact, win, and make sure that our messaging was crisp and aligned to the business. We wanted to earn the right to become a trusted advisor.”

Each section of the report gives the current status of the theme being discussed, its business impact, and the top-planned investments that CPOs intend to make in each area in 2021.

For Denis Royer, Senior Vice President at WNS Denali, the key takeaways are:

“First, CPOs strive to increase their reach, effectiveness and efficiency. They recognize which gaps impede their organization to capture optimum value, while the goal post keeps advancing. Second, the key challenge resides in prioritization and laser focus, as resources and investments are not infinite, while time passing without meaningful progress can reveal lost opportunities or trouble ahead. And third, I noticed significant gaps according to the survey results (as outlined above), in stakeholder and business alignment, digitalization, operating model and talent.”

With many procurement leaders finding they had limited awareness of peer activity last year, owing to less networking opportunities and more time invested in adapting to a new way or working, not to mention dealing with business disruption, this report offers quantified insights to help reinforce CPOs’ strategic planning with confidence and purpose. You can access the report here: Procurement Pulse Check for 2021