Gartner analyst Andy Kyte says South African organisations have disappointed with their lack of focus on strategic procurement, which could adversely impact their global competitiveness.
Kyte, a Gartner research fellow and vice-president, says a significant problem is the complexity of the relationship between an organisation`s business units and head office as to who actually owns the procurement process.
"Because procurement has not been elevated to the strategic level, there is little or no realisation that it could help save about 50% of every rand spent buying supplies," Kyte told ITWeb in a telephone interview late last week.
Some South African organisations have recognised procurement as a strategic tool. One such instance is publishing group Naspers, which uses M-Web CommerceZone to help reduce the collective cost of buying supplies from various vendors for the group`s subsidiaries.
"However, very few of similar organisations are willing to take the plunge into putting in their own procurement systems," Kyte says. "Part of the reason is the unwillingness to upset long-established relationships with suppliers who have had a cosy relationship for many years."
Kyte says the procurement process has been pretty much an "IT Cinderella", because it has long been a sub-function of the chief information officer.
"Organisations are slowly realising that they probably do need a chief procurement officer as well in order to ensure they get the best deals out of their procurement process," he says.
Outsourcing of services is another issue that falls squarely under the ambit of procurement, especially in Europe and the US.
"Such deals are complex and strategically important. They often extend over a 10-year or more period, and their management is critical for the long-term survival of the company," Kyte says.
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