Press release
Hackett: Procurement Operating Costs Increase For the First Time in a Decade
Digital World Class Procurement Orgs Drive 2.4X Greater ROI While Spending 21% Less on Operations MIAMI--(BUSINESS WIRE)-- Procurement operating costs at
About this update from The Hackett Group, Inc.
[{"type":"text","content":"\nDigital World Class Procurement Orgs Drive 2.4X Greater ROI While Spending 21% Less on Operations\n\n\n MIAMI--(BUSINESS WIRE)--\nProcurement operating costs at typical companies increased for the first time in more than a decade this year, in response to unprecedented uncertainty, including supply disruptions, inflationary pressures, and environmental, social, and governance initiatives, according to new Digital World Class® research from The Hackett Group, Inc. (NASDAQ: HCKT).\n\n\nDespite increases in year-on-year operating costs, Digital World Class procurement organizations excel at cost optimization compared to typical organizations, The Hackett Group® found. They now operate at 21% lower cost than their peers and have 32% fewer staff. In addition, Digital World Class procurement organizations see improved resiliency, provide their companies with greater business value and demonstrate higher levels of business excellence across a wide array of key metrics. For example, they drive nearly 2X more savings due to spend cost reduction, generate a 2.4X higher ROI, are 86% more likely to be viewed as a valued partner, and see 76% lower process costs per order. As a result they are better able to navigate uncertainty, risk and complexity because they have greater strategic focus and are more adaptive to changing circumstances.\n\n\nBecause of their lower operating costs, Digital World Class procurement organizations now have a $6 million annual cost advantage over their peers (for a typical $10 billion enterprise), the research found. The research answered the question as to the value of effective digital transformation by highlighting an undeniable correlation between Digital World Class and improved overall enterprise performance. The data concluded that companies with at least one business services function operating at Digital World Class levels see a five-year average performance premium over their industry medians. These include an 80% higher net margin, 24% higher earnings before interest, taxes, depreciation and amortization margin, 89% greater return on equity and 44% higher total shareholder return.\n\n\nA public version of the research, “Resilience: The Digital World Class Procurement Advantage,” is available free, with registration, at https://go.poweredbyhackett.com/rdwcafin2305sm. It contains nearly 50 metrics deta...