Executives could supercharge their procurement teams into more effective and efficient operations through adoption of agile practices, a global report has found.
But the State of Agile Procurement Survey 2022, commissioned by the World Commerce and Contracting and the Lean-Agile Procurement Alliance, shows a disinterest by executives in agile is working against market expectations.
“Becoming Agile” has been a hot topic for several organisations catalysed mostly by the affects of Covid-19 which caused volatile and unpredictable market conditions.
Responding procurement professionals from the six continents surveyed say more support can greatly benefit their business outputs.
“In comparison to the last report (in 2020), there has been a 12% increase in those starting the journey to become more agile or having successful pilot projects,” the report says.
“However, the chosen transformation approach indicates that a majority of respondents are not receiving enough leadership support to go agile in a structured way, nor are they including their partners in the journey.
“This lack of executive engagement in driving change is a risk to its speed and effectiveness.
Furthermore, a failure to include key partners in the transformation will constrain the benefits that can be achieved from delivering agile across the whole value chain.”
The 2022 report indicates the scale of disruption is showing no sign of slowing down and “business leaders are increasingly turning to agile techniques as a way of streamlining process and functional performance.”.
That said, a minority of respondents have coordination of agile at company level even though 91% are at some stage of an agile transformation within their overall organisation. Just 6% include their partners / vendors.
The research suggests unlocking more agile knowledge can increase speed and adaptability of teams.
“For several years, organisations have recognised that market change has increased the need for speed and adaptability. As this report shows, about one in six took action,” it said.
“But this left more than 80% of organisations seriously exposed when facing the mass disruption of a global pandemic.”
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Agile procurement – the key findings
Drawing on research from the the World Commerce & Contracting 2021 Benchmark Report, key insights of the State of Agile Procurement Survey 2022 showed:
- Almost 50% of organisations report that they are using agile contracts and more than a third of these say that use is growing.
- Based on their experience, many realise that performing on agile contracts (or indeed even gaining agreement on what form an agile agreement should take) is extremely difficult when the underlying organisation has not developed agile process capability.
- There are extensive initiatives underway that either complement or perhaps prepare the ground for a shift to agile working methods. For Procurement and Sales Contracting groups, these include process simplification (identified as a high priority by 64%) and establishing a digital strategy (identified by 38%).
- 65% are working to better define future value and 41% are pursuing increased automation, including improved integration of data.
“Yet the pressing need for quality, speed and transparency – plus the importance of more agile trading relationships – means that executive
pressure will not reduce and the momentum for change will continue,” the report says.
It is this which causes us to believe that agile processes and practices will steadily become ‘the new normal.’”
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