Almost 90% of procurement and supply organisations agree that adopting agile is of strategic importance to their business to deal with the greater market uncertainty.
The latest results front the global Annual State of Agility In Procurement and Supply Report suggest that adopting agile is a top priority for executives. There is a heightened sense of urgency driven by the pressing need to protect growth and margins through more adaptive capabilities.
But while there has been a noticeable reduction in the disparity between the executive support needed and the implementation of agile practices within commercial functions, most organisations still do not prioritise agile adoption at the board level.
A total of 88% of those surveyed backed adopting agile, but 42% of respondents currently have no immediate plan to make it happen, while 83% of respondents recognise the growing need to work within coordinated supply networks or ecosystems.
“There is a heightened sense of urgency driven by the pressing need to protect growth and margins through more adaptive capabilities,” The State of Agility in Procurement and Supply Report says.
“For both buyers and suppliers, this drives a need for greater focus on outcomes and value – both of which may alter during the life of their relationship. This also means a reduced focus on the traditional aspects of procurement, such as cost, and an increased focus on value.”
Reasons for adopting agile
The top three reasons for adopting agile are to enhance the ability to manage changing priorities or the need to rapidly adjust to altered market conditions, to reduce time to market and to overcome complexity. Since last year’s report, there is a greater need among those surveyed to improve alignment with their business and stakeholders.
The research recorded a 19% increase in the number of respondents who have started an agile transformation in their function or at an enterprise level. But respondents are not receiving the executive support needed to become agile in a structured way.
The report says opportunities exist to involve key partners in the to extend value throughout the value chain.
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A total of 82% reported being at some stage of an agile transformation, while 18% were yet to commence.
Procurement and supply teams ‘going it alone’
The lack of support is shown in the figures for the transformational approach with just 14% being backed by an executive action team to lead the transformation from the top down.
Nearly half (46%) are doing it alone or with agile guidance from coaches.
The top three barriers to agile adoption reported are lack of knowledge, organisational resistance to change and the challenge of changing mindsets.
The strategic priorities
Both of the top three priorities for supply and procurement mirror one another.
The top three strategic priorities for procurement include digitalisation of procurement, training employees to be ready for the next challenges and agile transformation of the procurement function.
In supply, the top three priorities include digitisation of sales, training employees to be ready for the next challenges and agile transformation of sales function.
Download a copy of the State of Agility in Procurement and Supply Report.
