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WNSDenali-WBRProcure-ConStronger-ProcurementEcosystems (2).pdf
- 1. Building STRONGER Procurement Ecosystems in 2022 &Beyond Turning Procurement into a Strategic Asset and Growth Enabler
- 2. Research Contact: Chris Rand ResearchManager, WBR Insights Chris.Rand@wbresearch.com Copyright © 2022 WBR Insights | All Rights Reserved The non-branded editorial content that appears in this report is owned and distributed by WBR Insights. Distribution of this content is restricted to only WBR Insights and any sponsors of this report represented herein. Building Stronger Procurement Ecosystems in 2022 & Beyond Turning Procurement into Strategic Asset and Growth Enabler Be Honest—What Do You Think of Our Reports? Help us improve—take our 42-second survey (Yes, we timed it!) for a chance to win a redeemable reward. TAKE THE SURVEY
- 3. 3 04 Executive Summary 06About the Respondents 08 Key Findings 09 Operating Models Require the Biggest Transformation in 2022 11 Procurement Can Help Address Talent Challenges Through Stronger Training and Retention 13 Leaders Will Focus on a Broad Strategy to Improve Operating Models 15 A New Technology Platform is Necessary to Improve Digital Enablers 17 Conclusion: A Steady Approach to 2022 18 Key Suggestions 19 About the Sponsor 20 About the Authors Table of Contents
- 4. 4 The maturity ofa procurement program can in many ways be determined by the maturity of the analytics used to observe and control spend. Organizations that have taken an aggressive stance towards the development of these capabilities often have AI-based tools in place that simplify the generation of analytics and provide decision makers with practical insights. This type of advanced procurement workflow allows team members to refocus their attention from tactical work to strategy. For category managers, these systems are likely either already in place or on their way to being implemented. Now, procurement leaders have an opportunity to determine if their current operating models contribute enough value to the business. Given recent disruptions, they must also determine if they have the right talent, knowledge, capabilities, and technologies in place to support the organization’s strategic initiatives. This report analyzes how advanced procurement ecosystems are supporting the function’s objectives in terms of talent, strategy, and technology. It also examines how confident procurement leaders feel about their current digital sourcing capabilities. Executive Summary
- 5. 5 WHO WE ARE Wehelp procurement increase their strategic value to the business. Outcome-driven companies partner with WNS Denali to operationalize their procurement function and improve financial performance and efficiency. We work alongside our clients to co-create, implement, and execute next-generation customized operating models to increase the strategic impact of procurement for their businesses. Our procurement practitioners provide a range of advisory and managed services, along with enabling technology to help our clients build an integrated procurement ecosystem that empowers them to create more value and outperform in the market. WHY WNS DENALI? We take a deliberate approach to support our clients in achieving procurement excellence. ■ Ecosystem Builder: We will help you transform your procurement ecosystem through our wide range of source-to-pay solutions and enablers. ■ Co-create to Innovate: We will create value alongside you through proven operations management approaches and the smart application of technology. ■ Technology-agnostic Approach: We will optimize your existing technologies, deploy new solutions, and fill gaps with our proprietary solutions to support your digital transformation. ■ Flexible and Agile Partners: We will provide a dedicated team and meet you where you are in your transformation journey, no matter what the size of the engagement. LEARN MORE ABOUT US MISSION AND VALUES Our values guide us in our daily decision-making and enable us to fulfill our mission. OUR LEADERSHIP Our secret advantage is our people who bring extensive knowledge and deliver unique solutions that drive procurement value. ABOUT WNS WNS (Holdings) Limited (NYSE: WNS) is a global Business Process Management (BPM) leader. We co-create success stories in an age of constant disruption.
- 6. 6 About the Respondents TheWBR Insights research team surveyed 100 procurement leaders from across the U.S. and Canada to generate the results featured in this report. Which best describes your current role? Is your role global, regional, or local? Most of the respondents are either vice presidents (32%) or department heads (19%). The remaining respondents are directors (21%), category managers (15%), senior vice presidents (9%), and C-level executives (4%). Most of the respondents occupy a regional role (53%) at their organizations. Over one- third of the respondents (37%) occupy a global role and just 10% occupy a local role. Vice President Regional Category Manager Department Head Global Senior Vice President Director Local C-Level 32% 53% 37% 10% 19% 21% 15% 9% 4%
- 7. 7 What industry doesyour company represent? What is the total amount of spend under management within your organization? The respondents represent companies in various industries, including CPG and retail (16%), insurance (16%), high tech (15%), and banking and financial services (14%). Over one-quarter of the respondents (27%) have more than $2 billion in spend under management within their organizations. CPG Retail Less than $500 million Life Sciences Healthcare Insurance Travel High Tech Banking Financial Services $1.5 billion - $2 billion Manufacturing 16% 12% 13% 15% 14% 1% 14% 16% $500 million - $1 billion $1 billion - $1.5 billion More than $2 billion 36% 28% 27% 8%
- 8. 8 Key Findings Among therespondents: claim their company leaders perceive the procurement function as a growth enabler that adds strategic value to the business. 70% 42% claim their operating models are the areas of their procurement ecosystems that require the biggest transformation and improvement in 2022. will provide training and other skill-building opportunities while 49% will improve employee retention efforts to improve talent management in 2022. 52% are somewhat confident and 37% are very confident their procurement team has the right amount of talent, knowledge, and capabilities to achieve their objectives in 2022. 54% 50% 60% plan on selecting and deploying a new technology platform to improve the user experience for procurement and business stakeholders in 2022. are only somewhat confident that their organizations have an optimal procurement operating model for 2022, while 10% are not very confident. Most are only somewhat confident (42%), not very confident (17%), or not at all confident (1%) that their organizations have the right digital enablers to achieve their goals in 2022.
- 9. 9 Procurement ecosystems have transformedsignificantly since the function began taking a more strategic role in the organization. At many companies, procurement leaders are drivers of innovation, not merely heads of a department that is focused entirely on cutting costs and reducing waste. Much of this transformation has been accomplished through the implementation of new technologies. Automation, integrated software, and advanced applications like AI are helping procurement operations reach new categories and enabling companies to scale. Indeed, 70% of the respondents to this study believe their company leadership perceives the procurement function as a growth enabler that adds strategic value to the business. At these organizations, procurement has likely integrated with other functions within the business and is playing a significant role in predicting how the company can achieve growth. Strategic procurement functions are often exemplified by their ability to tap into new categories and form meaningful partnerships with suppliers. They may also have successfully implemented technologies that make the organization more flexible and adaptable to market disruptions. Operating Models Require the Biggest Transformation in 2022 70% 30% Does your company’s leadership perceive the procurement function as a growth enabler that adds strategic value to the business? Yes No
- 10. 10 Which one ofthe following areas of your procurement ecosystem requires the biggest transformation and improvement in 2022? Overall, the procurement department can only be as successful as its ecosystem allows. That ecosystem is characterized by three categories: its operating model, its digital enablers (transformative technology), and the success of its talent management operation. A significant number of respondents (42%) believes their operating model requires the biggest transformation and improvement in 2022 for their companies to continue to be successful. Fewer respondents say the same about their digital enablers (30%) and talent management initiatives (28%). Reaching a successful procurement operating model requires the function to coordinate a transformation across multiple dimensions, not just technology. Most companies will need to adapt their procurement functions to meet the fast-paced environment of today’s business world. For example, value capture is dependent upon the organization’s ability to identify shifts in demand, both inside and outside the organization. Sustaining value generation requires the function to establish a robust and efficiently- governed supplier management program. Underpinning all of these capabilities is technology, but also talent. 42% 30% 28% Operating Model Digital Enablers Talent Management
- 11. 11 Procurement Can HelpAddress Talent Challenges Through Stronger Training and Retention Based on the responses to this study, procurement organizations are suffering from a significant confidence gap in their current talent management programs. Providing training and other skill-building opportunities 52% Improving employee retention efforts 49% Shifting our focus to strategic activities while outsourcing lower-value and tactical work 48% Adjusting our hiring profile to add new capabilities 42% A significant portion of the respondents are only somewhat confident (54%) or not very confident (9%) that their procurement team has the right amount of talent, knowledge, and capabilities to achieve objectives in 2022. Only 37% say they are “very confident” in their teams’ capabilities. How confident are you that your procurement team has the right amount of talent, knowledge, and capabilities to achieve your objectives in 2022? How do you plan to improve talent management in 2022? To improve talent management in 2022, most of the companies surveyed plan to provide training and other skill-building opportunities for procurement employees. This is an important step for veteran employees who may be struggling to understand newly introduced concepts or novel technologies. In each case, about half of the respondents plan to improve employee retention efforts (49%) and shift their focus to strategic activities while outsourcing lower-value and tactical work (48%). 54% 9% 37% Very Confident Somewhat Confident Not Very Confident
- 12. 12 Talent profiles arechanging, and so are talent requirements. Procurement can align the requirement side of talent management and provide access to the right resources. — Regional Category Manager, CPG Retail Company In written responses, many of the respondents believe that their talent gaps aren’t the result of a talent shortage. Instead, they believe that if they can procure and properly align external and internal resources, they could successfully train and upskill new and existing employees to meet the demands of the future. For example, a regional department head at a high-tech company says, “From a procurement point of view, we can manage the external side of talent management. If given the opportunity, we can source the right people to assist with talent management.” Several other respondents say their procurement teams can play a significant role in sourcing the technologies and capabilities their companies need. Talent management solutions and training tools are just a few of the resources the department can help with. “There are multiple talent pools internally and externally which we can support with highly specific technology solutions,” says a global category manager at a manufacturing company.
- 13. 13 Leaders Will Focuson a Broad Strategy to Improve Operating Models As we noted, many of the respondents believe transforming the function’s operating model will be the most important step in improving the procurement ecosystem in 2022. Very Confident Somewhat Confident Not Very Confident Not At All Confident 40% 50% 10% 0% Developing category strategies, playbooks, and operating guides to better manage our spend 43% Resetting objectives and KPIs to better align procurement goals to business outcomes 41% Outsourcing specific operations and activities to a managed service provider 40% Becoming more proactive in engaging business stakeholders to understand their needs 34% How confident are you that your organization has the optimal procurement operating model to achieve your objectives in 2022? How do you plan to improve your operating model in 2022? Nonetheless, the respondents say they are relatively confident that they have an optimal procurement operating model. Many also believe their current model will help them achieve their objectives in 2022. For example, 40% of the respondents say they are very confident in their current operating model. Another 50% say they are somewhat confident. Still, this does indicate that most of the respondents (60%) feel there is room for improvement and that transformation is warranted. Furthermore, the respondents are planning a broad spectrum of improvements to transform their operating models over the next 12 months. A significant number of companies will develop category strategies, playbooks, and operating guides to better manage their spending (43%). This strategy will also help new employees integrate themselves into the company’s operations.
- 14. 14 Digitization cannot occur forits own sake—it must adhere to specific use cases and coordinate with value generation across the business. Meanwhile, 41% will reset their KPIs to better align with business outcomes and 40% will outsource specific operations to a managed service provider. The latter of these two strategies has become increasingly popular as a means to cut costs, but it can also improve efficiency. When repetitive and redundant tasks are outsourced or automated, this allows procurement staff to focus on strategic objectives—it also gives them more time to process their procurement data and make predictions. In other verbal responses, procurement leaders explained specifically how they believe procurement can improve its operations. Many say that digital solutions hold the key to improving almost every area of procurement’s operating model, from its data operations to its integration with the rest of the company. “Procurement shouldn’t operate individually; instead, it should develop seamless connectivity internally and externally along with a good forecasting ability,” says a global vice president at a life sciences company. “I strongly believe in the power of digitization for this development.” Similarly, a C-level executive from a financial services organization says, “If we learn about each process thoroughly, we can identify prime locations where digitization can improve the operational outcome and procurement visibility.” Indeed, many of the respondents say digital solutions are necessary to transform their operational models. However, they believe implementation must be targeted to specific processes. “Identifying precise areas in procurement operations that can be upgraded with digital support will eventually deliver better results,” says a regional vice president at a travel organization. “If procurement understands its current operational model well, it can make very specific additions and eliminations.” — Global Director, High Tech Company
- 15. 15 A New TechnologyPlatform is Necessary to Improve Digital Enablers 1% Selecting and deploying a new technology platform to improve the user experience for procurement and business stakeholders 60% Increasing the adoption and value of existing technology 43% Improving data quality across our technology landscape 37% Developing a comprehensive digital transformation roadmap 30% Investing in new point solutions, RPA, and other emerging technologies 28% Digital enablers are technologies that drive digital transformation, serving as a platform for more targeted applications. Some primary and recognizable examples include cloud computing, mobile computing, and Software-as-a-Service. Most procurement functions are already using a host of digital enablers to varying degrees. For example, most businesses are already using cloud-based technology. However, not every company is using cloud computing to its fullest extent, such as to process vast quantities of data for a predictive analytics function. How confident are you that your organization has the right digital enablers to achieve your goals in 2022? At a total of 59%, 42% of the respondents are only somewhat confident that their organizations have the right digital enablers to achieve their goals for 2022, while 17% are not very confident. This indicates that most of the respondents again believe there is room for improvement. How do you plan to improve your digital enablers in 2022? 42% 17% 40% Very Confident Somewhat Confident Not Very Confident Not At All Confident
- 16. 16 At 60%, mostof the respondents will improve their digital enablers in 2022 by selecting and deploying a new technology platform. Specifically, they intend to improve the user experience (UX) for procurement and business stakeholders. While UX considerations may not always be top of mind when making strategic technology decisions, they are often central to the success or failure of new technology deployment. Poor UX typically leads to low or slow rates of adoption among users. This inevitably leads to wasted spending and wasted time. Similarly, 43% of the respondents say they will focus on increasing the adoption and value of their existing technologies. This suggests that a significant number of procurement departments are still working to get their teams habituated to the tools they adopted in 2021 or earlier. Finally, over one-third of the respondents (37%) will focus on improving data quality across their technology landscapes. Clean and operable data is necessary for any type of business transformation. Through strong governance and even data democratization, procurement teams can leverage their operational data for sustained value generation. In their qualitative responses, many procurement leaders believe the function can take steps to make its digital enablers more effective. Primarily, they hope to make the deployment of new applications frictionless and easier to adopt among team members. However, several respondents also say that 2022, or at least the first half of the year, will not be a time to make large changes to their existing digital enablers. Instead, specific, targeted digital change on a smaller scale may enable them to make iterative improvements without the need for a large-scale investment. According to a global vice president at a financial services organization, “Being a bit more vigilant in 2022 will make a big difference, as we aren’t sure with the state of the pandemic.” Similarly, a senior vice president from a technology company says procurement “shouldn’t chase a lot in 2022 because the market will remain on a corrective path in the first 6 months. Chasing stability will bring improvement eventually.” Other respondents echo these points, but they also see promise for the deployment of more advanced digital enablers, such as artificial intelligence and machine learning. One respondent says these technologies “should become a priority now that we have some visibility in 2022.” “Considering the need for digital enablers should be the first step in 2022. Investing only in the most important or the most accessible will remain key.” — Regional Vice President, Insurance Company
- 17. 17 In their finalline of questioning, researchers asked the respondents to provide their views on how procurement can continue to rise in its role as a strategic business partner. Many respondents reiterate that engaging in targeted and highly-specified technology investments will be the best way to improve strategic value. Indeed, several respondents say the function should focus specifically on “long- term visibility” and “a more predictable model” to generate more stability. Other respondents say the function must take a more holistic view of how it operates within the business. “Eventually, procurement needs to make the right decisions and then help the organization maintain a seamless flow of operations,” says a global director at a technology company. “I strongly feel that digital intelligence will provide accuracy and seamlessness to procurement and operations.” Although there is still some uncertainty due to the pandemic, procurement leaders are preparing for another stage of transformation. Many will prioritize a new technology platform to improve the user experience and improve adoption. Others are suggesting that the function focus on more targeted investments with the overall goal of transitioning from a solution-based operational framework to one of intelligence, predictability, and value-creation. Conclusion: A Steady Approach to 2022
- 18. 18 Key Suggestions I believeit all comes down to good decision-making. If procurement sets a good base for decisions or delivers on the requirements of a decision, it can change the outcome of the organization and its performance. — Regional Director, Insurance Company your current operating model and identify target areas for transformation. Many respondents believe procurement’s operating model is the part of the ecosystem that requires the biggest transformation in 2022. adopting a new technology platform to support your transformation goals in 2022. Most of the respondents plan to deploy a platform that improves the user experience for procurement and business stakeholders. objectives and KPIs to better align your procurement goals with overall business outcomes. playbooks and operating guides to help your team better manage its spending. repetitive and redundant activities so that your team members can focus more on strategic objectives. Analyze Develop Outsource Reset Consider
- 19. 19 Outcome-driven companies partnerwith WNS Denali to operationalize their Procurement function and improve financial performance and efficiency. We work alongside our Clients to co-create, implement, and execute next-generation Procurement operating models tailored to their specific needs and designed to increase the strategic impact of Procurement for their business. WNS Denali’s experts provide a range of advisory and managed services, along with enabling technology and support, to help our Clients build an integrated Procurement Ecosystem that empowers them to outperform the market. Contact WNS Denali to learn how we help our Clients create greater business value by operationalizing Procurement. For more information, you can visit us at www.wnsdenali.com. About the Sponsor
- 20. 20 About the Authors Forover 20 years, ProcureCon has helped companies develop and implement world-class sourcing programs through interactive workshops, innovative keynotes and intimate networking sessions. All designed to take you beyond cost savings. ProcureCon is built for practitioners, by practitioners - Whether you’re a CPO or a rising star, a large or small spend company, ProcureCon has content and built-in connections to ensure your long-term sourcing success. For more information, please visit procureconeast.wbresearch.com. WBR Insights is the custom research division of Worldwide Business Research (WBR), the world leader in industry-driven thought-leadership conferences. Our mission is to help inform and educate key stakeholders with research-based whitepapers, webinars, digital summits, and other thought-leadership assets while achieving our clients’ strategic goals. For more information, please visit www.wbrinsights.com.