Historically viewed as a cost drain focused almost exclusively on finding the lowest bid, procurement has undergone a shift in recent years, transforming into a strategic partner critical to an organization’s overall success. Today, procurement is not just about securing the lowest bid – it’s about driving innovation, enhancing efficiency, and aligning with broader organizational goals, such as sustainability and risk management. The findings from PlanetBids’ 2024 State of Procurement Survey paint a vivid picture of this shift and highlight the growing influence of procurement teams.
Procurement’s Strategic Shift
According to the survey, 62% of procurement professionals see their role evolving to become more strategic, with a strong emphasis on technology adoption (61%) and sustainability initiatives (30%). This shift underscores procurement’s ability to contribute beyond operational efficiency, serving as a key driver of value creation and risk mitigation.
For public agencies and organizations alike, procurement teams are moving from back-office operations to front-line contributors. This evolution requires new mindsets, tools, and skills to position procurement as a strategic powerhouse.
Key Drivers of Procurement’s Transformation
KEY DRIVER #1
Technology Integration
With 76% of organizations adopting procurement technology, the emphasis on tech-driven processes is undeniable. However, the journey doesn’t end with adoption. Full integration is where the true value lies – streamlining workflows, enabling real-time decision-making, and providing actionable data insights.
By leveraging eProcurement software, automation, and data analytics, procurement teams can transition from being reactive to proactive, resulting in smarter, faster, and more strategic decisions that align with organizational goals.
KEY DRIVER #2
Sustainability as a Core Focus
As organizations prioritize environmental and social governance (ESG), procurement is uniquely positioned to lead sustainability efforts. From selecting suppliers who offer sustainable practices and products to implementing environmentally-friendly purchasing policies like paper-free bidding, procurement teams are shaping the future of responsible business practices.
Agencies with budgets over $50 million are especially focused on sustainability, with 18% prioritizing these initiatives. For smaller organizations, sustainability might feel like a luxury, but it can also be an opportunity to drive long-term savings and enhance community impact.
KEY DRIVER #3
Enhanced Risk Management
Procurement teams are taking on a crucial role in safeguarding organizations – 30% of respondents to our survey emphasized risk management. Whether it’s through better supplier vetting, contract compliance, or real-time risk assessment tools, procurement is at the forefront of identifying and mitigating potential disruptions.
For larger organizations, advanced risk management practices are already in place, but for smaller teams, this is an area ripe for growth. Resource-constrained teams can leverage technology to monitor and manage risk and protect their organizations more effectively.
The Skills and Tools Needed for the Future
To fully embrace this transformation, procurement professionals need more than just the right technology – they also need the skills to use that technology effectively. The survey revealed that:
respondents are looking for technology training programs.
want access to online learning resources.
see software vendor support as a crucial resource.
Continuous learning is critical, especially for a veteran workforce. As procurement evolves, seasoned professionals must upskill to stay competitive, embracing tools and strategies that enable data-driven decision making and innovation.
How Procurement Aligns with Organizational Goals
The survey highlights the ways in which procurement is aligning with broader organizational missions:
- Driving Efficiency: Automation and streamlined workflows help agencies maximize resources and do more with less.
- Supporting Sustainability: Selecting eco-friendly suppliers and reducing waste allows procurement to align with sustainability goals.
- Enhancing Compliance and Risk Management: Better processes ensure adherence to regulations and mitigate risks.
- Contributing to Innovation: Procurement teams are becoming hubs of innovation, driving organizational success through smarter strategies and relationships.
Solidifying Procurement’s Strategic Role
Adopt and Integrate Technology
Invest in tools that enable real-time insights, automation, and streamlined operations.
Emphasize Continuous Learning
Provide training and resources to ensure your team can adapt to changing demands and tools.
Align with Broader Goals
Position procurement as a partner in achieving organizational priorities like sustainability, efficiency, and risk management.
Measure and Communicate Value
Use data and KPIs to demonstrate procurement’s impact on organizational success.
Conclusion: Procurement’s Bright Future
Procurement is evolving into a strategic powerhouse that organizations can’t afford to overlook. By leveraging technology, prioritizing sustainability, and aligning with organizational goals, procurement teams can drive innovation, efficiency, and value.
The time to act is now. Procurement teams should embrace the tools, skills, and strategies that will define the future of the industry. Those who adapt will not just survive – they’ll lead the way.
Ready to learn more?
Download the full 2024 State of Procurement Report to explore how procurement is reshaping the future of organizations.
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