Grocers Face Obstacles in Tech Adoption, Procurement Expertise

Problems with technology adoption and procurement expertise are chief among the internal obstacles holding back retailers, including grocers, from delivering sustainable results, according to a new report from Proactis, a global spend-control and e-procurement solution provider.

In "Retail Market Report: The Value Gap in Procurement," which detailed a survey of 130 procurement practitioners across grocers and other retailers in North America, respondents named the following internal obstacles that most reduced their organization’s procurement performance:

• Technology implementation and adoption (44 percent)
• Gaps in sourcing and procurement expertise (41 percent)
• Limited staff capacity (32 percent)
• Lack of overall sourcing and procurement vision and strategy (31 percent)

“To gain a competitive advantage and generate sustainable business value, procurement teams need a holistic sourcing approach that combines the right balance of technology and skilled people and resources,” said Brian Miller, VP of services at Proactis. “Building an in-house team to cover the experience and expertise necessary in today’s complex procurement environment is no easy task.”

The implications of not achieving this balance can lead to delayed results. More than 55 percent of procurement teams said that it takes at least six months to achieve measurable results from a technology implementation. Only 11 percent have achieved return on investment within three months after implementation.

“Securing results within three months should be the standard – not the exception,” added Miller. “Technology is imperative for procurement success, but teams need both experienced people and solid processes in place to complement and extract the full value out of the tools they use.”

It can be challenging to replace legacy systems, transform rapidly evolving processes and keep up with technology advances. Successful procurement leaders are “aggressively addressing” these challenges simultaneously to achieve an advantage. Adopting a well-rounded strategy that includes easy-to-use technology, complemented by expert sourcing services, helps retailers extract greater value and remain competitive in a fast-moving environment.