Procurement leaders feel they are held back from making a greater strategic impact by a lack of interest from other business functions, according to research by KPMG.
Its study, Beyond Purchasing, found that 54 per cent of CPOs, purchasing executives and supply chain directors believed that disinterest from other functions in how procurement expertise could be used strategically was the main barrier. This view was also shared by 38 per cent of non-procurement executives.
But the research among almost 600 executives worldwide – half of whom were in procurement or supply chain – also revealed concerns over the function’s ability to take on such a role.
Thirty-four per cent of non-procurement executives believed procurement staff lacked an understanding of the wider business – compared with 20 per cent of procurement respondents – while 23 per cent said the procurement function was not aligned with the broader corporate strategy. This view was shared by just 14 per cent within the function.
Thirty-five per cent of procurement specialists admitted their organisation focused too much on simple cost reduction at the expense of value; a view that was also shared by a much larger group (53 per cent) of non-purchasers.
After a lack of interest by other functions, the next two biggest obstacles identified by those in procurement were a failure by other departments to consult them early enough in major purchasing decisions and a general culture of resistance to change.
“Procurement professionals seem frustrated that their input is not having the strategic impact it could, not least because of the way procurement is perceived by their peers in other parts of the organisation,” said the study, conducted for KPMG by the Economist Intelligence Unit.
“Procurement has a long way to go to elevate the role of the profession and the contribution it can make to businesses at the executive level,” it concluded.
But the potential for procurement expertise to be used strategically does appear to be acknowledged by senior management, as opposed to peers in other business functions. Just 27 per cent of purchasers and 25 per cent of non-purchasers felt a lack of interest or understanding at a senior level was a barrier to procurement making a more valuable contribution.
