Authored by Mickey North Rizza
It’s that time of year when we start thinking about our New Year’s Resolutions. With it comes the quest for something better, leading to predictions of what the New Year will bring. I am no different than everyone else, so here are my Procurement predictions for 2014.
1. Cost savings will always be important, but more important is tying cost savings to the financial statements. In 2014 Procurement will become more educated on the financial impact of operating and gross margins, Return on Assets (ROA), Return on Invested Capital (ROIC) and Earnings per Share. The education will result in more companies starting to report their Procurement Cost Savings in financial terms.
The prediction: In 2014 Procurement will start reporting all monetary results in financial statement acceptable terms. Additionally, standard financial reporting terms and methodologies integrated into the overall business financial statements will become common practice for leading Procurement teams by 2016.
2. Transformation programs ebb and flow, but Procurement transformation continues to stall because of leadership, resources and initiative fatigue. With Procurement financial accountability evolving, Procurement transformation will become increasingly valuable.
The prediction: Procurement transformation efforts in 2014 will uncover financial opportunities that will strongly impact the business financials positively, uncovering untapped potential for years to come.
Stay tuned for part 2 of my predictions for procurement in 2014!