Procurement to see 2012 staff and budget hikes—MAY 2012 PRINT EDITION

Globalization will increase offshore procurement jobs by over 50 percent by 2013, study finds

May 23, 2012
by Purchasingb2b Staff

Procurement organizations can expect small budget and staff increases in 2012, according to recently released key issues research from The Hackett Group, Inc. Procurement is also focused on demand and pricing volatility—the “new normal”—with globalization increasing offshore procurement jobs by over 50 percent by 2013, the research noted.

The Hackett Group’s 2012 Procurement Agenda: Enabling Enterprise Growth…Without Disabling Profits finds procurement leaders face a unique challenge in 2012: organizations want procurement to help global growth while protecting supply and lower input costs. The research finds companies expect a small uptick in procurement budgets in 2012, with operating budgets rising one percent and staff up three percent.

The research finds companies expect the volatility spike which occurred with the recession in 2008/2009 will persist for at least two or three years. Many companies in the study said they expect changes of 25 percent or greater in input prices, customer demand, and talent availability. The group recommends organizations develop greater “supply agility”, meaning supply base agility, contract flexibility and procurement function agility while reducing supply chain risk.

Increased globalization and selective outsourcing are causing structural changes in procurement, the study found. Organizations plan to increase their full-time equivalents (FTEs) in low-cost regions by over 50 percent by the end of 2013. This will involve moving routine processes offshore and shifting higher-value work to external providers.