Sourcing & Procurement Leadership

Transform sourcing & procurement operations for greater value creation and innovation

Top Supply Chain Procurement Priorities

When it comes to procurement leader's single biggest focus, identifying and mitigating supplier risk saw the largest increase in priority ranking from last year.

Procurement leaders have identified the biggest goals and roadblocks to achieve their 2022 priorities. Download the infographic to view peer insights to shape your procurement strategy.

  • New polling data from the Gartner annual survey of procurement leaders
  • Year-to-year changes to procurement strategy
  • Peer benchmarking on key investments

Download Supply Chain Procurement Infographic

Compare peer insights for your supply chain procurement strategy.

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    Role of Third Parties in Our Businesses: 72% of procurement professionals agree with the statement "New-In-Kind Technology Services", 71% agree with "Outside of the Company's Core Busienss Model" and 70% agree with "increasing Number of Startups"

    Increased Sourcing & Procurement Complexity

    Sourcing and procurement is becoming more critical as supply chains grow increasingly complex. Specifically, how we use suppliers is changing: +70% of sourcing and procurement professionals report using suppliers to tap into new-in-kind technology services and/or something outside of their organization’s core business model. 

    Organizations are more reliant on suppliers than ever before. In such a world, it is the role of sourcing and procurement to unlock new value from the supply base and protect the organization from future disruption.

    Transforming Sourcing & Procurement Strategy

    There is a lack of discipline and consistency in sourcing and procurement, specifically on cost management and business value creation through category strategies, supplier performance management and collaboration with strategic supply partners. Sourcing and procurement leaders also struggle with mitigating supply base risk (e.g., operational disruption, financial loss) and navigating new technology (e.g., automation, advanced analytics).

    Sourcing and procurement leadership must invest in supplier risk management, digitalization, future of work and postpandemic recovery. Key criteria for sourcing & procurement success are cost optimization, supplier resilience and responsible sourcing.

    Supply chain sourcing and procurement insights you can use

    Supply chain sourcing and procurement leaders must move beyond short-term cost management to leverage supplier capabilities to their maximum advantage in a structured and segmented fashion. This involves aligning supply chain sourcing strategies, driving stakeholder engagement, and setting and communicating the right metrics internally and externally to drive the right behavior.

    What sourcing and procurement activities matter most?

    Don’t waste time on sourcing and procurement activities that won’t move the needle. Explore our activity map to identify the 29 essential activities for managing sourcing & procurement. 

    Effectively implement your responsible sourcing strategy

    45% of procurement professionals say meeting legal obligations is the most significant driver of responsible sourcing programs for the organization. Download the infographic for peer insights into effectively implementing responsible sourcing programs.

    Expand supplier diversity initiatives in your procurement strategy

    57% of procurement leaders report they have a formal supplier diversity program. Do you? Download the infographic to learn how today’s procurement leaders are responding to supplier diversity pressures.

    Enable cost optimization in your sourcing and procurement

    52% of procurement leaders think professional services are ideal for cost optimization. However, the most significant barrier to cost optimization exists outside of procurement. Explore four cost optimization approaches to resolving business resistance.

    Secure investment for your procurement technology

    71% of procurement leaders think that procurement technology investments are a low priority when setting the IT budget. Explore the infographic to learn how to use procurement technology to secure a competitive advantage.

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    Gartner Sourcing and Procurement Case Studies

    We needed to setup a supplier relationship management program but didn't know where to start, so we reached out to Gartner to help us establish a framework and structure. What we got from our partnership with Gartner was a lot of time with an analyst to help us think through all the steps we needed to take to have a supplier relationship management program in place. Taking these steps got our program started and off the ground.

    VP, Global Procurement

    Food Manufacturing/Agriculture Industry
    Case Study

    Leveraging Supplier Category Intelligence to Reduce Costs

    With an impending contract renewal with their largest supplier, a medical device manufacturer was lacking a well-defined strategy to renegotiate terms intended to streamline costs. Learn how Gartner helped guide their negotiation strategy and recommended ways the client could leverage vendor category intelligence saving the client up to $600,000 in annual costs.

    Saved $600,000 in annual costs by leveraging supplier category intelligence

    Gartner Supply Chain Top 25 for 2022

    See the 18th annual ranking to learn the standard for supply chain excellence.

    See the Top 25 List

     

    Gartner Supply Chain Symposium/Xpo™

    Join the world's most important gathering of CSCOs, supply chain executives along with Gartner experts to transform and innovate your supply chain strategy.

    Sourcing & Procurement: FAQs

    Procurement is the corporate function that has governance over purchasing decisions for a company. Activities of the procurement function include strategic vendor evaluation and selection, competitive bidding, contract negotiation and purchasing. Effective procurement practices enable organizations to reduce costs and maximize value.

    Strategic sourcing in supply chain is a standardized and systematic approach to supply chain management that formalizes the way information is gathered and used. Strategic sourcing enables organizations to leverage their consolidated purchasing power to find the best possible value in the marketplace. To remain competitive, organizations should expand their procurement expertise beyond purchasing to include strategic sourcing and negotiation to optimize cost and risk.

    Supplier relationship management (SRM) is a business initiative that many companies undertake to build mutually beneficial relationships with suppliers. Well-designed SRM programs help companies to increase collaboration by identifying the right suppliers with whom to partner. Top business drivers for implementing SRM include cost optimization, risk mitigation, top-line growth from supplier innovation, operational process improvements and preferential treatment from suppliers as a customer of choice.

    Despite the business case for SRM, only 35% of sourcing & procurement leaders say they have an effective supplier segmentation model. And 77% say their organizations lack an effective process to capture and develop supplier ideas. Collaboration with the supply base and supplier innovation are key to sourcing & procurement success.

    Leaders in sourcing & procurement partner with Gartner to drive better cost, quality, delivery and competitive advantage from suppliers. We offer the data-driven insights and frameworks for targeting resources to the suppliers that matter most for the organization.

    Supplier risk management is the ability to assess and monitor supplier risk by tracking supplier financial performance, geopolitical risks, news sentiments, judicial filings and regulatory compliance.

    Supplier risk management has been an area of underinvestment in many sourcing & procurement functions. Most companies lack competitive and dynamic supplier risk management capabilities. A reactive approach to vulnerabilities means that emerging risks and opportunities often get missed.

    Turn to Gartner for help minimizing operational supply disruptions. We offer trend sensing data to help you anticipate risk events further in advance and respond faster when problems arise. We also study how winning sourcing & procurement leaders foster resilience in the supplier network, and then we share best practices with our client base.

    Category strategies too often look and feel like execution plans, not strategies. It’s not surprising then that sourcing activity inconsistently yields desired business value, and that cost optimization efforts frequently become cost reduction initiatives. Gartner is committed to supporting sourcing & procurement leaders with category management: We offer insights, tools and advice for driving sourcing discipline across your business, which in turn drives supplier ROI.

    It’s difficult to define and measure the impact of responsible sourcing and supplier diversity initiatives. And no wonder, since only 13% of sourcing & procurement leaders excel at identifying and onboarding diverse suppliers, and only 26% have embedded and supported supplier diversity in their organizational culture. These trends must change, and fast: The year-over-year retention rate of diverse suppliers is just 54%.

    Gartner advisors can coach you in building strong relationships with a diverse supplier portfolio and ingraining responsible sourcing and supplier diversity into organizational culture. We work with companies regarded highly for their responsible sourcing and supplier diversity success, and then we document their best practices so that other organizations can adapt.

    According to Gartner research, only 6% of senior business leaders rate sourcing & procurement among the top three corporate functions with digital potential. Articulating the value and impact of transformational technologies for sourcing & procurement can be difficult, but ultimately technical and culture barriers are holding back the digitalization of the sourcing & procurement function. 39% of sourcing & procurement leaders say their company culture is resistant to the change required to implement digitalization.

    Gartner can help: We have the technology expertise needed to select the right technology solution for your sourcing & procurement organization, and drive cost savings and productivity improvements from the system.

    It’s critical that sourcing & procurement serve as a value generator for the organization, but the pace of change today makes this exceedingly difficult. It’s especially hard to develop sourcing & procurement staff capabilities at pace and evolve organizational structure.

    But sourcing & procurement leaders are driven to improve: 96% say that staff will have to significantly improve their effectiveness at using digital technology to succeed in their role, and 81% indicate that adapting organizational structures to business digitalization is an urgent issue in their 2021 strategic plan.

    Gartner helps sourcing & procurement clients sustain progress on their journey as a trusted advisor to the business. We provide the tools and guidance that sourcing & procurement leaders need to build their teams’ digital-capable skill set, and we enable sourcing & procurement teams to deliver business value in everyday work.

    Support for Sourcing & Procurement Leaders

    Gartner provides trusted insights and objective advice to help sourcing & procurement leaders manage performance, risk, value creation and innovation of the sourcing & procurement team as well as suppliers