7 Pressing Challenges Procurement Professionals Face

Procurement professionals play a vital role in securing the resources organisations need to thrive. However, they often encounter complex challenges that can impact efficiency, cost, and business performance. Here are seven key challenges procurement professionals face today: 

1. Supplier Risk Management 

Managing supplier risk is a top concern for procurement professionals. According to Deloitte’s Global Chief Procurement Officer Survey, 74% of procurement leaders cite risk as a major priority in their strategic plans. Supplier risks include financial instability, operational disruptions and compliance issues, all of which can lead to costly delays and reputational damage. A proactive approach to supplier management is crucial, involving regular assessments and strong contingency plans. 

2. Cost Control and Budgeting 

Keeping costs in check while securing quality goods and services is an ongoing challenge. Recent surveys indicate that 77% of procurement leaders feel pressured to reduce costs while maintaining value. With rising inflation and supply chain disruptions, balancing cost with quality is harder than ever. Procurement teams need to use data analytics and spend analysis to make cost-effective decisions and negotiate better terms with suppliers. 

3. Sustainable Sourcing 

Sustainability has become a strategic priority for organisations. A survey by McKinsey found that 66% of consumers are willing to pay more for sustainable products, putting pressure on procurement to adopt eco-friendly practices. However, sourcing sustainable materials can be more expensive and complicated, requiring additional research, vetting, and collaboration with eco-conscious suppliers. 

4. Supplier Relationship Management 

Building strong supplier relationships can lead to better contract terms and supply reliability. However, procurement professionals often struggle with a lack of visibility into supplier operations and performance. According to Ivalua, 66% of organisations believe that better collaboration with suppliers is needed to help increase supply chain resilience. Therefore, investing in collaborative supplier management tools and techniques can help foster more strategic partnerships. 

5. Compliance and Regulatory Changes 

Procurement professionals must stay compliant with complex and ever-changing regulations. Failure to comply can lead to costly penalties and damage to an organisation’s reputation. In fact, a survey by Deloitte  found that 60% of procurement professionals list compliance as one of their biggest challenges. Keeping up-to-date on regulations and implementing compliance management software can help mitigate these risks. 

6. Digital Transformation and Technology Integration 

With the advent of digital procurement tools, integrating new technology into existing systems is a daunting task. The Hackett Group quotes, ‘There are still opportunities for procurement teams to expand their use of technology beyond just transactional processes.’ To address this, organisations should provide training and allocate resources to support digital transformation in procurement. 

7. Talent Shortage 

Procurement teams face challenges in attracting and retaining skilled talent. According to a survey from CIPS, 37% of respondents cited attracting and retaining talent as one of the biggest challenges in procurement. Developing internal talent through training and career development programs can help address this gap, ensuring a resilient and skilled procurement team. 

In a rapidly evolving landscape, procurement professionals must adapt to these challenges to drive sustainable growth and success. Therefore, with Veriscape’s Procurement as a Service, our team will take these challenges off your hands and help you strengthen your procurement operations by focusing on other business priorities.  

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