Procurement organizations can achieve breakthrough improvements by embracing digital technology

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The new digital world class of the Hackett groupâ„¢ Standards raise the bar for procurement performance

MIAMI & LONDON, October 07, 2021– (BUSINESS WIRE) – By fully embracing digital transformation, procurement organizations can achieve higher levels of efficiency, effectiveness and customer experience, including 25% lower cost, higher ROI. 2.5x more supply, and more, according to the new Digital World Classâ„¢ purchasing research from The Hackett Group, Inc. (NASDAQ: HCKT).

“For decades, the Hackett Group benchmarks have been the gold standard by which most global companies measure world-class performance in procurement and other business services. Today, with the growing impact of digital transformation, the Hackett Group is raising the bar even higher with its change to a world-class digital measurement standard. Our new research details how high-tech organizations are reaching new levels of peak performance, ”said Erik Dorr, Hackett Group’s vice president of research.

“The results are impressive. But the result is simple. Our research provides empirical evidence for the impact of digital transformation,” said Dorr. “For years, companies have made incremental improvements, optimized processes, reduced costs and transactional labor to achieve world-class performance. But new technologies are enabling many companies to achieve levels of operational excellence and digital world-class business value. And they can get much of that advantage by layering digital technology on top of their existing systems, rather than embarking on large-scale infrastructure changes. “

A public version of the research, “Digital World Class Procurement: Reaching New Heights in Peak Performance” is available free, with registration, at http://go.poweredbyhackett.com/procdigwc2106sm. It contains over 30 metrics detailing the performance of world-class digital procurement organizations. But here’s a summary of the main research findings:

Better efficiency World-class digital procurement organizations demonstrate operational excellence in the form of greater efficiency. They now operate 25% lower in cost than typical procurement organizations (i.e. peers) and 6% lower in cost than traditional world-class procurement organizations, despite greater spending on technology. For a $ 10 billion company, this represents procurement cost savings of $ 6.9 million and $ 1.3 million, respectively. Over the past decade, the cost gap between the world class and its peers has widened slightly, and in 2021 it has widened further. World-class digital procurement organizations also employ 33% less full-time equivalents (FTEs) than their peers per billion dollars in revenue. The gap is even greater for operations and compliance management FTEs (57%), allowing them to deliver these processes at a cost of 55% less.

Increased efficiency – The Digital World Class advantage isn’t just about cost. These elite procurement organizations are also able to deliver greater business value in the form of better quality services – better stakeholder engagement, better supplier relationship management, and product innovation. Compared to their peers, they have a 2.5 times higher ROI from purchases and 25% more spend influenced or managed by purchases. They have 70% more FTE in strategic roles like product development assistance, and 15% more FTE in supplier partnerships. Technology plays a key role in driving these results, with world-class digital procurement organizations spending 20% ​​more than their peers on technology as a percentage of spend. They are also investing in emerging technologies such as intelligent automation, advanced analytics, and collaboration tools to reduce labor costs.

Improved customer experience – The greatest business value offered by digital world-class organizations also extends to the stakeholder experience – they have a performance advantage over their peers when it comes to customer perceptions. They are 85% more likely to be viewed by stakeholders as taking a proactive approach to mitigating procurement risks and 19% more likely to be viewed as a valued business partner. In addition, they are almost 7 times more likely to be considered to have effective business knowledge.

Six areas of excellence – The activation of technology is at the heart of the digital world-class performance advantage. However, to unlock the full potential of technology, leading procurement organizations are also focusing on five other essential levers: data and analytics; technological architecture; evolution of the operating model; end-to-end process design and ownership; and talent. The research provides details on how Digital World Class is sourcing in each of these areas. For example, in data and analytics, the pandemic has led to a new urgency in improving procurement data management practices, and world-class digital procurement organizations have a significant head start. . World-class digital procurement organizations are also at the forefront of architecture modernization and cloud migration. Finally, to focus on talent, leading procurement organizations continue to invest in their workforce by increasing the workforce in more strategic areas. A highly skilled, strategic workforce is at the heart of digital world-class businesses, as advanced technologies provide new tools to provide better service to stakeholders and suppliers. These roles require a keen sense of analysis to generate insight, as well as emotional intelligence, relationship management, a focus on innovation and change, as well as a better understanding of business operations and business needs. stakeholders.

Digital World Class Action Plan – The Hackett Group’s research provides insight into how companies can assess their current performance, maturity and capabilities, identify future capabilities to advance their digital agenda, and create a journey map for progressing to performance levels of digital world class.

World-class digital procurement organizations are those that achieve top quartile performance in operational excellence and business value through a range of weighted metrics in the Hackett Group’s comprehensive procurement baseline. The Digital World Class analysis is also designed to quantify the opportunities for performance improvement achievable by maximizing the technological activation of procurement work and optimizing the technology landscape of procurement. The Hackett Group’s world-class digital sourcing research is based on an analysis of the results of recent benchmarks, performance studies, and consulting and transformation engagements in hundreds of global companies.

About the Hackett Group

The Hackett group® (NASDAQ: HCKT) is an intellectual property-based strategic consulting firm and a leading enterprise benchmarking company for global businesses, delivering digital transformation, including the implementation of enterprise cloud applications industry-leading, workflow automation and analytics that enable world-class digital performance.

Drawing on our unprecedented intellectual property of nearly 20,000 benchmark studies with the world’s largest companies – including 93% of the Dow Jones Industrials, 91% of the Fortune 100, 80% of the DAX 30 and 55% of the FTSE 100 – captured by our benchmarking platform, Quantum Leap®, and our Digital Transformation Platform (DTP), we are accelerating the implementation of best practices.

More information about The Hackett Group is available at: www.thehackettgroup.com, [email protected], or by calling (770) 225-3600.

The Hackett Group, the quadrant logo, World Class Defined and Enabled, and Digital World Class are registered trademarks of The Hackett Group.

Caution regarding “forward-looking” statements

This press release contains “forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933 as amended and Section 21E of the Securities Exchange Act of 1934, as amended. Statements including, but not limited to, words such as “expects”, “anticipates”, “intends to”, “plans”, “believes”, “seeks”, “believes” or other similar phrases or variations of such words or similar phrases indicating, present or anticipated or expected future events or results are intended to identify such forward-looking statements. Forward-looking statements are not statements of historical fact and involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company to be materially different from the results, performance or achievements expressed or implied by forward-looking statements. Factors that may impact these forward-looking statements include, but are not limited to, Hackett’s ability to effectively market its digital transformation and other consulting services, competition from other consulting and technology companies that may impact. ” have or develop in the future, similar offerings, the viability of Hackett and its services, and other risks detailed in Hackett’s reports filed with the United States Securities and Exchange Commission. Hackett does not undertake any obligation to update this press release or any forward-looking statements it contains.

See the source version on businesswire.com: https://www.businesswire.com/news/home/20211007005106/en/

Contacts

Gary Baker, Director of Global Communications – (917) 796-2391 or [email protected]


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