2023 CPO Agenda: Supply Continuity & Inflation Combat

Procurement orgs prioritize supply continuity & combat inflation in 2023, while talent mgt jumps to top of planned improvement initiatives. Technology spend is

2023 CPO Agenda Supply Continuity & Inflation Combat

Ensuring supply continuity and combatting inflationary price increases are the top two priorities for procurement organizations in 2023, according to new CPO Agenda research from The Hackett Group, Inc. (NASDAQ: HCKT). But talent management has jumped to the top of procurement’s list of planned improvement initiatives, while strategic priorities are driving procurement’s continued focus on reducing spend cost, and pursuing digital transformation remain critical, along with improving analytics and insight capabilities.

Talent management is the No. 1 planned improvement initiative for procurement organizations in 2023, The Hackett Group® found. But it was surprisingly absent from procurement’s list of top priorities for 2023, in part because executives view talent management as a relatively mature capability. Several other priority improvement initiatives show lower maturity levels, including supplier relationship management, responsible procurement, third-party risk management, core procurement technology enablement and supplier performance management.

Procurement organizations will also need to find ways to do more with less in 2023, according to the research. An expected 10.6% increase in workload combined with smaller increases in procurement staffing and budgets will drive a productivity gap of 7.4% and an efficiency gap of 7.8%. An increase in technology spend of 5.7% indicates a growing reliance on technology to increase procurement productivity, efficiency and effectiveness.

Procurement leaders are recognizing that success requires a data- and insight-driven approach with technology as a key enabler. Nearly one-half of all companies surveyed have large-scale deployments of spend analytics tools in place and another 44% have pilots. Spend analytics is also among the technology areas with the highest growth rates for 2023 which shows that procurement organizations are looking towards technology as an integral part of their strategy moving forward into 2023 and beyond.

Final Thought: Procurement leaders are continuing