In our latest webinar with CASME, experts came together to discuss the state of indirect procurement in 2024. Here are some highlights from the discussion.
It’s a very interesting time to be in indirect procurement. Market and economic volatility, labour challenges, major advancements in technology and continuing inflation all present significant challenges for organisations of all sizes. But, those challenges also bring some unique opportunities to engage stakeholders, maximise efficiency and deliver new value to the business.
To discuss the evolving indirect procurement landscape in 2024 and beyond, we recently partnered with CASME to host a webinar panel discussion. During the session, indirect procurement experts from WNS Procurement, Visa and Amgen came together to explore the challenges they’re seeing today, and the strategies they’re employing to transform rising risks into opportunities to create value.
You can watch the full conversation on demand, but in the meantime, here are some highlights from the session.
Panel attendees:
- Greg Anderson – North America Practice Leader, WNS Procurement
- Graham Crawshaw – FCIPS, Procurement Content Director, CASME
- Aditya Jain – Senior Director, Visa
- Justin Virden – Executive Director and Global Head of Indirect Procurement and Global Strategic Sourcing, Amgen
The impact of inflation
Opening the discussion, Graham Crawshaw of CASME first asked the audience what their biggest barrier is to maximising indirect procurement efficiency. Perhaps unsurprisingly, the most common responses from the audience were around inflation and cost optimisation.
Financial pressures are still very high and clearly, for many organisations, it’s hard to mitigate their impacts at scale. When discussion moved to what procurement teams can do to help minimise the impacts of inflation, Justin noted: “It’s very hard to solve a problem if you can’t identify and measure it. You need the ability to understand what’s going on before you can effectively implement plans against it. That means understanding supplier dynamics, understanding where you’re a preferred customer, and where you have a strategic relationship with the supplier.”
The group echoed Justin’s insights around the impact that knowledge and visibility can have on your ability to manage inflation. Aditya added, “In times of uncertainty, the best thing we can do is enable our teams to make informed decisions quickly and respond to shifting conditions rapidly. That means providing them with a clear long- and short-term view of what’s going on around the world.”
Acquiring the right talent and skills
The second major challenge experienced by the audience was around acquiring and managing the right talent across their indirect procurement teams. For many, it’s been difficult to get people with the right skills through the door. However, interestingly this wasn’t the case for Aditya at Visa.
“For Visa it’s less about the availability of talent, because we see tons of resumes come in when we have vacancies” he said. “What I’m more concerned about is ensuring that the new talent we bring in today can operate in an agile way. Rather than simply having people responsible for managing specific categories, we want to build teams with a set of core skills that come together to solve different problems as conditions change.”
That said, talent shortages remain a major barrier for many, including Justin at Amgen. “We’re experiencing challenges in securing the right people. In our case, we’re on the West Coast of the US, while most talent in our industry is concentrated on the East Coast,” he said. “So, we’re trying to focus on building the specific skills we need within our existing indirect procurement team.”
Skills development was also front of mind for Greg, who flagged storytelling as an especially valuable skill for today’s indirect procurement experts. “Storytelling is a very important skill, and when you can tell stories around what you’re trying to achieve, that helps drive the right kind of impact” he said. “If you can go out there and start using storytelling in your interactions with stakeholders, you’ll drive far higher engagement with indirect procurement, which can lead to some great results.”
Managing and mitigating risk
Over the last few years, we’ve seen procurement become more and more involved in risk management. Some teams are making risk management a priority in indirect procurement, but how that looks in practice can vary a lot between organisations.
As pointed out by Justin, “The first challenge is identifying where procurement sits in your risk ecosystem, and what its role is in managing a variety of risks.” He then went on to explain how Amgen’s indirect procurement team help mitigate enterprise risk, saying “Through contracts and agreements, we set expectations around cybersecurity and data with our suppliers. But we also think about our suppliers’ suppliers, and risk across our extended supply chain.”
Aditya’s team at Visa mitigate risk in similar ways. “In the last few years, we’ve seen data and cybersecurity become major risk management areas. At Visa there’s zero tolerance to cybersecurity risk. When we get new contracts, it’s our responsibility to ensure that our cybersecurity standards are upheld,” he explained. “We educate our supply base to make sure that everyone we work with understands our cybersecurity expectations.”
But sometimes the steps taken take to mitigate risk can introduce new risks by accident. “You can consolidate suppliers to reduce risk, but that creates the risk of that supplier failing” remarked Greg. “Segmenting suppliers from a risk perspective can be very useful. Look at the impact a supplier can have on your business, then come up with an appropriate risk strategy based on that impact.”
Watch the full conversation on demand
These are just a few of the highlights from our discussion. In the full conversation, the panel explored strategies for improving stakeholder engagement, creating value through indirect procurement, and building skills within indirect procurement teams.
Watch the session on demand to find out exactly what the year ahead will hold for indirect procurement professionals.