The quality of

the speakers
and the material
was excellent.
Its so unique to
get to spend time
with your peers
especially from
other sectors we
all have the same
challenges.
- Larry Beard,
Procurement Director, Aer Lingus

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Introduction
Viewed through a simplistic lens indirect
procurement is a straightforward enterprise:
get a good deal on the equipment,
consumables and services which a business
needs to operate.
A question which is not always considered is
what the strategic significance of this is, how
it ties in with wider business objectives and
how quality and value are taken into account.
Leading up to ProcureCon Indirect
2016 we interviewed 100 indirect
procurement professionals with the goal
of understanding where the biggest
opportunities and challenges lie in 2016.

57% of all the businesses we interviewed

managed a spend of 500 million euros or
more, with 22% of those spending more
than one billion euros.
Nearly two thirds of all respondents said
that indirect procurement now accounts
for between 20% and 40% of total
procurement spend. This highlights the
importance of managing the indirect spend
effectively, and the effect it can have on the
bottom line.

Additional contributors:
The benchmark data and analysis contained in this report is complemented by selected quotations
taken from interviews with industry experts. The comments presented here are intended to add
personal insight and do not reflect the views or policies of their respective companies.
Lucy Bennell,
Director at
Bennell Associates

Tania Seary,
Founding Chairman,
Procurious

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PROFILING
What is the overall spend managed by procurement in your business today?

y <250 million euros

y >500 million euros
y 500 million euros - 1 billion euros
y 1 billion+ euros

21%
32%
25%
22%

What percentage of this spend is on indirect procurement?

y <0-20%
y 21-40%
y 41-60%

29%
58%
13%

y >10
y 11-50
y 51-100
y 101-250
y 251+

1%
9%
33%
26%
31%

How big is your indirect team today?

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Which indirect categories does your

business spend most on today?
77%
73%
66%
60%

58%

49%

y Marketing related services (media buying,

agencies)
y Professional services (consultants, advisers)
y Travel management

35%

y IT related services (hardware, software)

30%
28%

y HR related services (recruitment agencies,

training)

24%

y Facilities management and office services

(telecoms, furniture, cleaning, catering, printers)
y Utilities (gas, electricity, water)
y Consumable (grease, oil etc.)
y MRO (maintenance Repair Operation)
y Capital goods (plant & machinery)

Spend on marketing related services tops the list in 2016 (77%), followed by professional
services (73%), and travel management (66%).

Over the last few years, we have seen a genuine focus on recruiting and developing
procurement professionals with deep understanding of the marketing services
categories. The best of these individuals truly understand marketing ROI and can
build cases for spending MORE with suppliers to drive more effective marketing
promotions/events.
Lucy Bennell, Director at Bennell Associates

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Which categories are growing

fastest and why?
85%
81%
74%
73%
72%
26%

Professional services
(consultants, advisers)

Facilities management and office

services (telecoms, furniture,
cleaning, catering, printers)
HR related services
(recruitment agencies, training)
Marketing related services
(media buying, agencies)

Travel management

18%
14%
13%

IT related services
(hardware, software)

Consumable
(grease, oil etc.)

Capital goods
(plant & machinery)
Utilities
(gas, electricity, water)

Here we see some correlation between where indirect spend is focussed and principle
areas of growth. 85% of respondents saw a rise in spend on IT related services, followed by
professional services (81%) and facilities management (74%).

The pool of talented marketing procurement professionals has grown significantly

over the last 10 years and it clearly shows in these figures. They are capturing more
of the spend and making it visible to the businesses they work for. Businesses are
also investing in new digital marketing technology and services that just didnt exist
a few years ago.
Lucy Bennell, Director at Bennell Associates

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What level of competency would you

say your procurement team has in the
following categories?

y Best-in-class
y High
y Medium
y Low

e
bl
si
on g
sp cin
Re ur
So
t
en
em
sk ag
Ri n
a
M
t
r en
lie em
pp ag
Su an
M
nt
ry e
go em
te ag
Ca n
a
M
r
de t
ol en
eh em
ak ag
St an
M

It is a concern that so many companies still dont identify themselves as being bestin-class in category management. Category management / category strategy cant
exist without strong stakeholder engagement, risk management and SRM and in
this day and age is it CRITICAL that every company focuses on responsible sourcing.
All these competencies are linked and the most successful businesses have a clear,
uncomplicated category management process that pulls them together. Things are
getting way to complex there is a need to get back to basics.
Lucy Bennell, Director at Bennell Associates

Stakeholder engagement has long been a painful skill gap in the profession, so its
heartening to see strong growth in this competence. The spread of capability levels
across category, supplier and risk management, as well as responsible sourcing skills
shows that there is a real opportunity for indirect procurement teams across Europe
to collaborate and share their capability development learnings with their peers to
improve the overall competency of the profession in the region.
Tania Seary, Founding Chairman, Procurious

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How do you create value

for your business?

New
technology

Improved
systems /
processes

Improved IT
systems

Better hiring /
people

Growth
plans /
models
Marketing
tools

New technology is by far the area in which procurement rated itself most able to create
value followed by improved systems and processes and improved IT systems.

The non-traditional areas for procurement-managed spend such as IT, HR and

marketing have really cracked open, which gives existing procurement pros the
chance to learn about new categories, but also opens up the opportunity for IT, HR
and marketing professionals to leverage their deep category expertise and make the
exciting career jump into procurement.
Lucy Bennell, Director at Bennell Associates

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Which procurement objectives are most

important to your business?
#1 Cost leadership
Perhaps unsurprisingly the number one area
of importance for indirect procurement is in
the area of cost leadership. Taking a strong
stance on cost leadership is a significant driver
of improvement to the bottom line and indirect
procurement are expected to demonstrate
their ability to drive meaningful savings.

#2 Value delivery
Just like beauty, value is often in the eye of the
beholder. That being said, progressive indirect
procurement leaders increasingly not only
look to consistently add tangible value to the
categories in which they work but also actively
measure and target themselves on their ability
to do so.

#3 Operational efficiency
While driving down costs can be done by
negotiating better deals there is also some
considerable importance placed on increasing
operational efficiency. Doing so means
making better use of available resources and
ultimately saving money.

#4 Innovation in services
Procurement seek to lead innovation in the
way that an organisation uses services, from
HR, to IT, marketing and beyond. This is an
area in which procurement has the potentially
to add real value. The fresh availability
of external services can mean easy and
comparatively cheap solutions with minimal
risk, which is great for a growing company.

#5 Taking advantage
of digitisation
Organisations are rapidly digitising across
the board, and procurement is attempting to
make the most of the operational advantages
implicit in this change. The move to digitise
in many cases means completely overhauling
established business processes this presents
a significant opportunity for improvement,
and is an essential element of a successful
future for indirect procurement.

#6 Responsible sourcing
How is this made, and where does it come
from? These are important questions on the
lips of both procurement professionals and
the public. Although it has perhaps moved
out of the spotlight slightly during the last
12 18 months, especially on the public stage,
responsible sourcing remains a central pillar
of responsibility for indirect procurement.

#7 Talent development
Although talent development obtained the
least amounts of votes in our survey, there
are few procurement executives who would
argue the importance of having a plan in
place to develop the procurement leaders of
the future.

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Low

1%
Medium

23%

53%

High

How able are

you to align your
global and local
business area
requirements
to provide a
glocalised
best-in-class
procurement
service

p ro c u re m e nt

Best in cla
ss

i n

23%

C h a l l e n g e s

What are your biggest challenges

in this regard?
31%

y Building consensus on decision

making and whether local
management should report into
global procurement
y Deciding how to manage suppliers

21%

y Optimising communication across

timezones

19%

y Integrating different cultures

16%

y Convincing local management to

align with global procurement

12%

Confidence is high in procurements ability to provide glocalised services. 76% of

respondents rate themselves as high, or best-in-class.

The glocalisation challenges remind us that the predominant requirement of the

Global CPO is about change management and alignment. Social media and platforms
like Procurious provide these leaders with the vehicles to continually communicate
and guide their organisations in the required direction.
Tania Seary, Founding Chairman, Procurious

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To what extent do you predict that

automation will play a key role in the
future of your organisations
procurement strategy?
Its not part
of the plan
It will take a
minor role

2%

9%

It will be an
important factor
It will be critical
to our success

57%

32%

Automation is expected to play a big role in the future of procurement strategy. 89%
percent of respondents report that automation will either be an important or critical part of
their future.

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About ProcureCon Indirect

Valued for its commitment to peer to peer interaction, continuous
delivery of high quality speakers and a fresh, fast-pace, high-energy
programme every year ProcureCon Indirect is the most important indirect
procurement strategy conference in your events calendar.
Researched and developed specifically for the 200+ indirect/corporate and global sourcing
practitioners in attendance, ProcureCon Indirect will be held across 3 informative days.
Featured this year at ProcureCon Indirect:
v Responsible sourcing focus day
v Personalised itineraries for CPOs and Global Heads of Indirect
v Category-specific tracks
v More senior representation from more industry sectors than ever before
Make sure you and your team attend all three days at ProcureCon Indirect to access new experiences
that will help you drive team performance to new levels.

About WBR Digital

At WBR Digital we design and execute bespoke content marketing
campaigns all year round, delivering our clients unparalleled
access to the wider WBR event audience.
We believe in creating rich content that engages and inspires. We conduct in-depth industry research,
then add analysis and a double-shot of creativity, before marketing it for you, to targeted audiences of
your choosing.
Its industry research, its thought leadership, its quality content its the perfect opportunity to
generate qualified sales-ready leads.
Contact us to find out how your business could benefit from:
v Lead generation campaigns that fit your priorities
v Bespoke webinars, benchmarking reports and whitepapers
v In-depth research on current fast-moving issues and future trends
v The opportunity to position your company as a thought leader
Contact:
Chamatkar Sandhu
Digital Sales Director
Tel: +44 (0)20 7368 9383
email: chamatkar.sandhu@wbr.co.uk