The Chief Procurement Officer (CPO) agenda looks drastically different today than it did last year – and for good reason. Procurement’s top priorities in 2019, according to Deloitte’s Global Chief Procurement Officer survey, were meeting rising customer expectations, advancing technology and finding top talent – all of which are very aligned with a growing and disruptive economy.
Enter the global pandemic. Deloitte’s 2020 CPO Flash Survey shows a much different landscape. Today, procurement managers are adapting their strategies to thrive in the “next normal,” with a massive focus on business spend management and procurement digital transformation.
Spend management rules the day
Deloitte’s CPO Flash Survey found that cost management is the greatest priority for Chief Procurement Officers right now. In fact, procurement leaders are focusing on spend management approximately eight times more than other areas of their business.
Given the state of the economy, this is hardly surprising. When top top-line revenue growth slows, savvy procurement and financial leaders refocus resources on bottom-line value.
Success requires a robust spend management program. Start by ensuring purchasing processes are simple, accessible and user-friendly – which reduces rogue and maverick spending. Simultaneously, digitize, automate and centralize the entire procure-to-pay process, including purchasing, invoices and payments, which reduces costs and gives procurement more control over and visibility into spending.
Enable your procurement team to thrive
The CPO Flash survey found that two of the top three most critical success factors for procurement organizations to navigate the pandemic revolve around employees and teams, including workforce safety and effective virtual working. In this “new normal,” CPOs must equip their teams with the tools and resources to work effectively and foster a culture that empowers employees to do their best work everywhere and anywhere.
Procurement and AP teams face unique operational challenges when they aren’t equipped to work remotely. For mid-market companies specifically, no longer having anyone at the physical office checking the mail, processing paper invoices, or making check runs slows purchasing and AP operations, which ultimately impacts the bottom line and cash flow. In the current environment, equipping employees with a modern, mobile-first purchasing and AP solution that enables complete and 100% remote management of the entire procure-to-pay process has never been more important.
Preparing for extended disruption
Only 28% of survey respondents expect a quick return to pre-COVID-19 economics, while the majority (about 70%) expect and are planning for a much longer economic downturn. Considering second-quarter real GDP declined 40% in the European Union and 33% in the United States, this isn’t surprising. In other words, we’re in it for the long haul. In fact, 44% of CFOs are planning for a “return to normal” in Q2 2021 or later.
It’s time for procurement organizations to shift away from firefighting efforts and prepare for long-term disruption. If you’re not sure where to start, focus on three key areas:
- automating tactical and low-value tasks,
- enabling your team to work efficiently from anywhere and everywhere
- digitizing and modernizing the purchase-to-pay process.
For more information around how processes that streamline remote work productivity are no longer a nice-to-have, but a necessity, check out our latest whitepaper: Automation & Digitization: The Critical Drivers of Remote Productivity & Performance.