COVID – When procurement became critical

COVID brought many struggles. It was also the time for procurement to shine. Procurement functions across Australia quickly adapted and shifted their focus from cost reduction to supply risk mitigation and back to cost reduction.

We surveyed 412 organisations between April 2020 and August 2021 to obtain a time-in-motion dataset that shows how the different stages of the crisis impacted procurement teams in Australia.

We found that the procurement function was a major lever for organisations in their reaction to the COVID-19 crisis and induced recession. While not every organisation was impacted in the same way, the importance of procurement grew no matter if the revenue impact was negative, positive or minimal.

For 95% of participants, procurement has had a more positive impact than usual and for 42% it has become critical to the success of their business. We found that for almost two in three small organisations, procurement is now critical to their business success (61%). Table 1 also shows that 40% of very large organisations said that procurement has become critical.

When looking at how the importance of the procurement function has developed over time, we found that in 2020, 38% of all organisations said that procurement was critical to their success. In 2021 this number had climbed to 47%. Again, we found this effect to be strongest in small
organisations, where in 2021 76% stated procurement was critical. For 55% of organisations experiencing a negative revenue impact from COVID, procurement has become critical. This is up from 37% a year ago.

To understand how procurement reacted to COBID, download our ebook.