Three-quarters of senior procurement executives believe their business understands the importance of procurement issues, according to data prepared by the Economist Intelligence Unit.
However, 54 percent feel misunderstood by their own organization.
The image problem which procurement suffers from is reinforced by the fact that 53 percent of respondents with a non-procurement role feel it is too focused on cost at the expense of value, while 40 percent feel it focuses on compliance ahead of innovation.
However, the report, entitled Beyond purchasing: Next steps for the procurement profession, suggests that a rosier future for procurement could be on the horizon if issues are addressed around skills gaps, leadership and integration at Board level.
“These are important times for procurement teams around the world. The maturity of the physical, financial and information supply chains has created the opportunity for global, effective procurement operations. These teams have now come to terms with their main raison d’être – cost-effectively securing high-performance goods and services. There is an incredibly complex balance for procurement to strike, managing factors such as tightening, imperative economic conditions for cost reduction, commodity price rises and fluctuations, supply market risks, increased globalization and business volatility”, said Daniela Nemoianu (photo), Advisory Partner at KPMG Romania.
A prime example of where procurement has a new, important role to play in the Board decision-making process is in monitoring the health of a company’s suppliers. “In these post-credit crunch days, the risk of a key supplier getting into financial difficulties should rank as a major concern. But who is better placed than the procurement team to keep an eye out for the warning signs?” said partner of KPMG.
“There are two sides to the procurement coin. On one side are the dedicated procurement professionals whose expertise is crucial in keeping costs down; something which is so important in an increasingly competitive market. On the other side though, are the strategic benefits which can be derived from a function which has its finger on the pulse regarding innovation, opportunities, competitor behavior and suppliers’ health,” Nemoianu commented.
Other critical areas in which Nemoianu thinks procurement has to raise its game include public procurement where there is an urgent need to slash red tape and optimize management capabilities. An acceleration of the EU funds absorption by both public and private sectors is vital for the Romanian economy, particularly in the context of the global economic downturn.
One of the impediments to more effective use of EU financing has been the low number of eligible projects caused by a discouraging combination of factors outside the control of the applicants: inexplicable delays in launching fully functional programmes and mechanisms, lack of awareness and preparation to handle complicated projects and procedures, unrealistic eligibility criteria, burdensome bureaucracy, fluctuation of rules and opacity.
The Government plans some changes to the Public Procurement Law, however little consultation was allowed. Tangible fast results in terms of mobilising the protracted programmes, cutting bureaucracy, simplifying access and procedures, increasing awareness and transparency are a must in this area.
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