Procurement trends for 2011

SAP research lays out key procurement goals

June 9, 2011
by By Michael Power

WHISTLER: On the opening day of PMAC’s 2011 annual conference, SAP presented the results of recently-conducted research. The survey results, presented by SAP’s Lalitha Rajagopalan, senior director of procurement solutions marketing,collected information from more than 300 procurement professionals across the globe. The survey focused on areas such as intelligence management, collaboration, sustainability and performance.

The new normal for procurement managers, she said, is trying to focus on cost reduction while still taking into account areas such as sustainability, supply chain risk and the demand for rapid productivity. The survey showed a rapid move towards the centralization of procurement functions, Rajagopalan said. In 2008, 35 percent of respondents said they were decentralized, while in 2010, that number had shrunk to only six percent. The change showed procurement’s move towards becoming a more strategic function within organizations, she noted.

Procurement’s goals had also become more closely aligned with those of finance departments, she added. In 2008, less than 20 percent of respondents were collaborating with finance, while in 2010 the number was 40 percent. As well, 73 percent predicted much greater collaboration with finance departments in the future.

Collaboration with suppliers has also become more important, Rajagopalan said. In 2008, only 11 percent said such collaboration was important, while in 2010, 35 percent thought it was important. Looking to the future, 95 percent said it would become very important.

During her concluding remarks, Rajagopalan said procurement has recently seen greater emphasis on collaboration and intelligence gathering. “Procurement is truly much more strategic than ever,” she noted.

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