The downturn has required a sobering reassessment of everything organisations do. And for many, procurement has been pivotal in delivering the changes required to improve cash flow, secure greater efficiencies and in some cases even keep businesses going.
Although we cannot make an unequivocal declaration that “it is all OK”, our economic survey suggests things are getting better. Many of the responses, and particularly those relating to how the profession has been affected by the downturn, are similar to those given a year ago, and a lot more positive than the replies in May 2009. At the very least, this suggests the worst of the recession is behind us.
One of the more striking measures is the huge fall in the number of CPOs who are “very concerned” about a key supplier failure. Almost none are; only six months ago, 28.7 per cent were. If the recovery is all about confidence, this type of leading indicator suggests it is returning in the senior levels of the procurement profession. Further, larger numbers of the CPOs forecast the downturn will be over within six months.
But what now for those who are on the way up? During the recession, many companies, local councils and government departments have relied heavily on buyers to help rebalance sudden and dramatic declines in revenues. This has been positive for us and in many cases boosted our influence and broadened the areas of spend under procurement’s control. And as the example of BP shows, a long-term and well executed procurement strategy delivers massive benefits – not simply one-off savings, but multimillion dollar deals that will offer greater value for years.
Another significant aspect of the recession for procurement has been the huge fall in the volume of people changing employers, particularly in the private sector. Redundancies and recruitment freezes have made those who have held on to their jobs grateful for them. And with very few organisations looking for new blood, there hasn’t been much movement. But this may be about to change.
As the survey also reveals, considerably fewer CPOs are sure of their team’s ability to manage the challenges of the next 12-18 months, a theme echoed in our “Facing a talent contest” feature in the current issue. This may be music to the ears of consultancies; it could also signal an increase in buyers moving to new employers.
The public sector has seen more recruitment in the recession, but with huge spending cuts forecast for next year the worst for these buyers may be to come. As government officials find themselves caught between the need to uphold service levels and the need to pay less for them, it is buyers who can help them to achieve those aims, insulating their stakeholders against the deepest cuts.
Wherever they are on the economic cycle, the recession continues to be the dominant backdrop across procurement.
Steve Bagshaw
steve.bagshaw@cpoagenda.com
