Hackett Research: Supply Assurance Now the Top Priority for Procurement

Rhea-AI Summary

The Hackett Group (NASDAQ: HCKT) recently released its 2022 Procurement Key Issues research, highlighting that supply assurance is now the top priority for procurement leaders, reflecting ongoing supply chain disruptions. Sustainability has also risen significantly in importance, now ranked fourth among procurement priorities. The report emphasizes the need for digital transformation and improved operational efficiency amidst challenges such as inflation and talent shortages. The findings are based on insights from over 250 procurement executives.

Positive

• Supply assurance elevated to top priority, indicating a strategic response to supply chain disruptions.
• Sustainability climbed to fourth priority, reflecting growing corporate responsibility and ESG commitments.
• Digital transformation remains a focus, with an expected 8% increase in capital investment for 2022.

Negative

• Procurement workload projected to increase by 11.4% without an increase in staffing.
• Budget reductions anticipated, creating efficiency gaps amidst growing operational demands.
• Escalating salaries and turnover in procurement may hinder strategic advisory capabilities.

2022 Procurement Key Issues Research Finds Sustainability Rising in Importance as Digital Transformation Remains a Key Focus

MIAMI & LONDON--(BUSINESS WIRE)-- Supply assurance is now the top priority for procurement, according to 2022 Procurement Key Issues research from The Hackett Group, Inc. (NASDAQ: HCKT). Sustainability has also risen more than any other procurement priority for 2022, as digital transformation remains a key focus.

2022 is quickly shaping up to be a challenging year for procurement, with key business risks, including increased supply chain disruption, inflation, commodity volatility, and labor and skills challenges, on top of the need to deliver cost savings in an inflationary environment. According to the research, the agenda for today’s CPO is now much broader than just a few years ago.

The full research, “The Procurement Agenda: 2022 Key Issues,” is available from The Hackett Group^® on a complimentary basis, with registration, at this link: http://go.poweredbyhackett.com/22prockey2201sm.

Key findings include:

Supply Assurance Elevated to Top Priority – Managing supply disruption and its impact on revenue remains procurement’s top priority, up from second in the previous year’s study. Cost-cutting, traditionally procurement’s number one priority, has slipped to the number two spot. This reflects continued disruptions driven by the global pandemic. The pandemic has also given suppliers greater leverage and control in the buying relationship – and procurement must adapt. Fallout from the growing conflict with Russia over the Ukraine may further accentuate supply disruption concerns. The key to addressing this is to build resilience by developing capabilities in supplier relationship management, improving analytics to better identify and predict supply chain challenges, and overall digital transformation.

Sustainability Rises in Importance – Sustainability rose more than any other procurement priority for 2022, jumping up four spots to the number four position, the research found. While sustainability has long been a top priority in Europe, it is now a much greater priority for U.S. companies. In addition, corporate social responsibility, including diversity, equality and inclusion, another key part of the environmental, social, and governance (ESG) agenda, continues to climb the ranks of priorities for many companies. These are areas where procurement can make significant impact. Procurement must be able to source responsibly to support the longer-term business impacts of climate change and diversity commitments and adapt to support ESG strategy and the execution of operational plans.

Digital Transformation Remains a Key Focus – Digital transformation remains a front and center enabler, now with a greater focus on obtaining value from technology investments and an increased rigor around data management to deliver up-to-date insights that inform supply risk, sourcing, and supply management, according to The Hackett Group’s research. Procurement leaders expect an 8% increase in capital investment and technology costs in 2022, in large part to drive digital transformation. Digital workforce enablement and core procurement application suites have the highest level of large-scale adoption in procurement. Data visualization and master data management tools are not far behind, and are also expected to see accelerated growth. But for digital transformation to be successful, procurement organizations must also focus on talent and data, the research suggested.

Critical Areas for Development – Five of procurement’s top 10 priorities for 2022 are deemed “critical development areas,” with high importance but low confidence in procurement’s ability to meet business expectations, according to The Hackett Group’s research. These priorities are: enable corporate sustainability; accelerate digital transformation; improve analytical, modeling, and reporting capabilities; align skills and talent with changing business needs; and improve procurement agility. If procurement cannot overcome challenges in these areas, it may be difficult to address critical priorities such as supply risk objectives, the research found.

Operational Efficiency Remains Critical – Procurement workload is expected to increase by 11.4% in 2022, the research found. But no increase is expected in staffing, and a reduction is expected in budget, creating large productivity and efficiency gaps that must be overcome, in part through the use of technology.

Talent and Skills Challenges – The efficiency gap, when combined with escalating salaries in procurement and the unprecedented turnover levels driven by the pandemic, will put great pressure on procurement organizations seeking to become better strategic advisors to the business and deliver on other priorities, according to The Hackett Group’s research. Procurement organizations must develop specific offensive (acquisition) and defensive (talent retention and development) strategies to mitigate these issues, close skills gaps in key areas such as leadership, data analytics and more.

Concerns Over Pandemic Fallout Continue – The pandemic has cast a long shadow and is causing increased concern in procurement over supply chain disruption, inflation, commodity price volatility, and the “Great Resignation” which is driving limitations from structural shortages of labor capacity and skills, the research found.

The Hackett Group’s 2022 Key Issues research is based on results gathered from more than 250 executives in procurement, finance, supply chain, HR, technology, and global business services at a global set of midsized and large enterprises.

About The Hackett Group

The Hackett Group, Inc. (NASDAQ: HCKT) is an intellectual property-based strategic consultancy and leading enterprise benchmarking firm to global companies, offering digital transformation, including implementation of leading enterprise cloud applications, workflow automation and analytics that enable Digital World Class^™ performance.

Drawing from our unparalleled IP from nearly 20,000 benchmark studies with the world’s leading businesses – including 97% of the Dow Jones Industrials, 94% of the Fortune 100, 70% of the DAX 30 and 51% of the FTSE 100 – captured through our leading benchmarking platform, Quantum Leap^® and our Digital Transformation Platform (DTP), we accelerate best-practice implementations.

More information on The Hackett Group is available at: www.thehackettgroup.com, info@thehackettgroup.com, or by calling (770) 225-3600.

The Hackett Group, quadrant logo, World Class Defined and Enabled, and Quantum Leap are the registered marks of The Hackett Group.

Cautionary Statement Regarding “Forward-Looking” Statements

This release contains “forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933 as amended and Section 21E of the Securities Exchange Act of 1934, as amended. Statements including without limitation, words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” seeks,” “estimates,” or other similar phrases or variations of such words or similar expressions indicating, present or future anticipated or expected occurrences or outcomes are intended to identify such forward-looking statements. Forward-looking statements are not statements of historical fact and involve known and unknown risks, uncertainties and other factors that may cause the Company’s actual results, performance or achievements to be materially different from the results, performance or achievements expressed or implied by the forward-looking statements. Factors that may impact such forward-looking statements include without limitation, the ability of The Hackett Group to effectively market its digital transformation and other consulting services, competition from other consulting and technology companies that may have or develop in the future, similar offerings, the commercial viability of The Hackett Group and its services as well as other risk detailed in The Hackett Group’s reports filed with the United States Securities and Exchange Commission. The Hackett Group does not undertake any duty to update this release or any forward-looking statements contained herein.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220510005193/en/

Gary Baker, Global Communications Director - (917) 796-2391 or gbaker@thehackettgroup.com

Source: The Hackett Group, Inc.

FAQ

What are the key findings of The Hackett Group's 2022 Procurement Key Issues research?

The research highlights supply assurance as the top priority, with sustainability rising significantly, and emphasizes the need for digital transformation.

How has sustainability affected procurement priorities for 2022 according to HCKT?

Sustainability has risen to the fourth position among procurement priorities, reflecting its growing importance in corporate agendas.

What challenges do procurement leaders face in 2022 as per the Hackett Group research?

Challenges include increased workload, budget reductions, and rising salaries, compounded by supply chain disruptions and talent shortages.

What is the expected capital investment increase for digital transformation in procurement for 2022?

Procurement leaders expect an 8% increase in capital investment and technology costs for digital transformation in 2022.