Procurement professionals are largely optimistic about their positions right now, but a new report from Dun & Bradstreet foreshadows a slightly different sentiment about both the compliance and procurement professions in 2018 and beyond.
According to D&B’s first-ever Compliance And Procurement Sentiment Report, more than 90% of 600 total respondents were “positive” about their ability to mitigate risk, reduce costs, and create world-class, advanced due-diligence programs. “Clearly,” the company reports, “compliance and procurement professionals believe that their function is and will continue to make a positive difference in the organizations in which they work.”
But the winds of change are in the air, and could impact that largely-positive sentiment in the near future. Here are four things that procurement and compliance are most concerned about:
The regulatory landscape is becoming more and more complex. D&B says both compliance and procurement leaders continue to be concerned with regulations. “The regulatory landscape is more complex, and organizations need due diligence programs that are robust, but flexible,” it reports. “These teams also need to be agile enough to respond to change quickly, while still meeting requirements.”
Fraud remains a major issue of concern to corporations in all sectors. More than half (55%) of professionals surveyed by D&B reported that their organizations have been subject to an incident of fraud in the last two years. “In an indication of the ongoing risks faced by compliance and procurement professionals from crime, we learned that 18% experienced fraud in the last three months alone,” the company states in its report, noting that the overall impact of fraud can have significant implications on a company and its procurement and compliance departments.
Procurement departments need more advanced technology. Despite the move toward using more automated intelligence and automation in procurement and compliance, D&B says there is much room for improvement in this area. “The feedback from respondents highlights the need for an effective technology infrastructure to support a risk-based approach and aid decision-making,” D&B reports, adding that technology like artificial intelligence and predictive analytics can save compliance and procurement functions both time and money.
The lines between procurement and compliance continue to blur. Less of a challenge, but still a key concern, is the continued convergence of compliance and procurement. “The two functions, while treated separately within some organizations, are both focused on similar processes and priorities, such as onboarding third-parties, mitigating risk exposure, and reducing costs,” the company reports, noting that it has seen the convergence of responsibilities and focus become more obvious.
For example, both compliance and procurement professionals have similar points of view around regulations, artificial intelligence (AI), and resources. “Close to one-third (30%) of the professionals surveyed indicated their focus spans both procurement and compliance,” according to D&B, “and an overwhelming majority (94%) of respondents with blended functions are key decision-makers.”
The Road Ahead
Assessing the results of D&B’s survey, Spend Matters Editor Sydney Lazarus writes that looking ahead to the next six months, these professionals cite customer/vendor due diligence; internal training on regulations; ongoing supplier and vendor monitoring; and implementation of a risk-based approach as their top concerns. These objectives differ by geography, with U.S. respondents more likely to cite vendor management as their top priority for the immediate future (whereas UK respondents are more concerned with preparing for current and future legislation).
“Ultimately, the professionals who feel the most prepared for existing and new regulations are those whose responsibilities span both procurement and compliance,” Lazarus writes. “Among this group (which makes up 30% of the respondents), 96% say they have the resources to meet existing and future regulations, and 94% say that they have the necessary support to implement new policies as needed.”