The 6 biggest deficits of procurement organizations – are you also affected?
It is certainly crucial for the optimization of procurement organizations to identify and eliminate deficits and problems in these organizations. In the following, we have compiled the six most important deficits and problems in our experience, which are also confirmed by evidence:
- Ineffective supplier management: A major problem in procurement is the inadequate management of supplier and service provider relationships. AT Kearney research shows that approximately 65% of procurement executives believe they do not have effective supplier management or service provider governance strategies in place, leading to missed opportunities for innovation and cost reduction.
- Manual processes and inadequate use of data: Many procurement organizations still rely on manual processes, leading to inefficiencies and increased operational costs. A study by the Hackett Group shows that companies that rely heavily on manual procurement processes have 26% higher processing costs per order. Against this backdrop, many procurement organizations are struggling with a fragmented database that is virtually impossible to evaluate, resulting in inadequate use of data. According to a study by Deloitte, only 22% of procurement organizations believe they have high-quality data, which significantly impairs their ability to make informed decisions. This deficit leads to missed opportunities for cost savings and strategic planning.
- Lack of automation and limited technology adoption: Point 2 becomes easy to understand when you realize that modern procurement technologies are not being introduced and used. As harsh as it may sound, efficiency and innovation are sometimes hindered. According to the study, over 40% of procurement organizations are lagging behind in technology adoption, leading to missed opportunities for cost savings and process optimization.
- Siloed processes and collaboration challenges: Where manual processes dominate, cross-functional collaboration is also regularly difficult. This not only reduces the efficiency of procurement, but also that of the interface functions. The study highlights that 48% of procurement organizations have problems with collaboration, leading to inefficiencies and missed opportunities for cross-departmental synergies.
- Limited strategic alignment: Procurement teams often struggle to align their strategies with overall business objectives. The Hackett Group found that only 32% of procurement organizations effectively align their strategies with business objectives, resulting in missed opportunities for value creation and strategic impact.
- Skills shortages: The lack of qualified procurement professionals is a well-known and unfortunately persistent problem. CAPS research shows that over 60% of procurement organizations have difficulty recruiting and retaining talent, which also impacts their ability to innovate and drive strategic initiatives.
We are currently compiling the most effective and possibly relatively easy to implement measures for the above areas of action for you in an upcoming „Einblick“.
Adconia – consulting beyond the ordinary
As Adconia GmbH, we advise our customers with the experience gained from more than 250 projects over more than 20 years – in matters relating to purchasing, supply chain and the digitalization of processes. Our goal is always to increase the contribution of purchasing to results through cost reduction, process automation or the qualification of the purchasing team. With a correspondingly broad wealth of experience, precise knowledge of day-to-day purchasing and a high level of professionalism, our consultants carry out training measures at eye level. We do this – depending on requirements – both as a sparring partner for specialists and managers with many years of experience and as a trainer for seasoned purchasing professionals and young professionals.