BrazilMost Asian organizations still on journey towards procurement excellence
Organizations across Asia still have a long way to go to reach higher standards of excellence in their procurement, especially in areas like technology and sustainability. That is according to a study from ArcBlue, which surveyed Chief Procurement Officers across Asia.
Getting procurement right is increasingly important in today’s dynamic business landscape. But organizations face significant obstacles like supply chain disruptions, talent shortages, climate crises, emerging technology, and rapidly shifting expectations from stakeholders.
The ArcBlue study asked Chief Procurement Officers (CPOs) to rate their functional maturity as Emerging, Developing, Advanced, or Leading. Many organizations ranked well in areas like Leadership & Influence, Organization, and Process & Governance.
On the other hand, CPOs self-evaluated at a lower level of maturity in areas like Sustainability and Technology.
The area of Leadership & Influence entails the ability for procurements teams to influence key decisions, to align objectives with the rest of the organization, and to mitigate risk effectively. The survey showed 79% of organizations align procurement strategies with broader business objectives, while 85% were actively mitigating procurement and supply chain risks.
The Organization category entails procurement’s structure and integration within the broader business. Other important areas are People & Skills, which involved talent acquisition and retention, Process & Governance, Value Realization & Results, and Supplier Management.
Among the most important categories are Technology and Sustainability, which some Asian organizations lag behind in. For example, only 57% of CPOs reported that their technology is fully aligned to their overall procurement strategy, and half said that their procurement technology was not fully integrated.
As far as sustainability, only 42% of Asian organizations said that they have clearly defined sustainable procurement strategy in place, and only a quarter said they have a clear understanding of Scope 3 emissions and are actively working with their supply chain on decarbonization.
It is clear why sustainability is difficult for procurement teams to get right. As climate change accelerates, the stakes are getting higher and the expectation to take action is increasing. Despite that, many companies fail to fully grasp their environmental footprint beyond direct operations.
“Procurement in Asia is undergoing a significant shift. What was once primarily a transactional function has now emerged as a strategic lever for value creation and a crucial driving force for organizational success,” said Chris Hampden, director of ArcBlue.
“By championing procurement’s value, investing in people, embracing technology, and implementing sustainable practices, procurement teams can become powerhouses – not only adapting to change but also shaping it.”
Headquartered in Australia, ArcBlue is an award-winning procurement consultancy with offices across the Asia Pacific region. The company is part of Bain & Company.
