Chief Procurement Officers (42 percent) cite supply chain disruptions as the biggest threat to procurement’s future success, followed by macroeconomic, geopolitical and compliance risks, according to new research from Gartner.
The technological research and consulting firm surveyed 258 sourcing and procurement leaders to understand the most significant risks that could impact procurement operations, while providing actions that can be taken to manage them.
The research revealed supply chain disruptions, such as natural disasters and transportation issues, are front of mind due to their unpredictability, velocity and magnitude of impact.
Andrea Greenwald, Senior Director Analyst in Gartner’s Supply Chain practice, said CPOs are coming to understand that the reactive measures they have employed to manage risks over the past four years will not be sufficient for the next four.
“The necessity of establishing a strategic supplier risk management program has never been more critical, as companies that neglect to develop such a program now will struggle significantly when the next crisis arises,” she said.
Macroeconomic factors – such as economic downturns, inflation and other economic factors – rank second with the potential to substantially influence long-term procurement strategies despite being more predictable, while geopolitical issues – such as tariffs, regulatory changes and compliance issues – tied for third.
Gartner suggests that a focus on future emerging risk is beginning to become apparent, with leading organisations now 2.2 times more likely to view energy availability and cost as a top risk as they become aware that access to energy will become a significant future concern.
Based on the survey results, Gartner’s three recommendations for CPOs include:
- Assess and prioritise risks: Evaluate the impact of all major risk factors and prioritise them based on their likelihood, impact and velocity. This includes considering organisational maturity and industry-specific factors
- Develop and/or strengthen partnerships: Segment suppliers that provide critical goods and services to the organisation and implement techniques to proactively safeguard the organisation
- Navigate internal complexity: Collaborate with strategy, finance and legal teams to address macroeconomic factors and compliance issues effectively
