Latest Research: Where does SA procurement face it biggest challenges?

BEE procurement, specifically implementing the New Codes, is considered the biggest challenge that South African procurement professionals currently face, said 481 respondents to a SmartProcurement survey.

The concern around The Codes is unsurprising, considering many organisations believe they stand to lose a BEE level or two. Concerns around the BEE Codes will be extensively debated at Smart Procurement World 2014.

Asked to choose their top-three challenges, 42% (202) of the 481 respondents said the BEE Codes keep them awake at night, with ‘contract management’ and ‘compliance’ sharing second place with 27%.

The concern around contract management speaks to a growing awareness in the country that up to 95% of spend under contract occurs after contract signature, during the contract management period, and consequently is a time that requires strict monitoring, but currently receives inadequate attention from business or government, which has led to numerous contracts that fail to deliver and consequent service delivery protests.
Noteworthy is that ‘enterprise/supplier development’ came in third (26%), above ‘skills transfer/capacity development’ (23%) and ‘organisational efficiency and strategic alignment’ (22%). It is possible that ED is among the top-3 challenges because of the greater weighting placed on it in the revised Codes and the strong role it plays in South Africa’s economic development.

It is interesting that ‘board-level buy-in’ shares last place, as less of a concern. Are South African procurement professionals brilliant communicators who enjoy a lot of board support? Or does the ranking suggest that ‘board-level buy-in’ appears on the agenda because it is a global concern, rather than a pertinent South African concern?

An additional challenge provided by one of the survey respondents is worth mentioning: “Matching treasury regulations to business-related outcomes”. We would like to hear your comments in this regard – are they chalk and cheese?

Finally, in a country where allegations of fraud and corruption are common place it is re-assuring that ‘transparent procurement and fraud reduction is among the top-7.

Overall the top challenges for procurement and supply chain are:
1. BBBEE procurement – New codes
2. Contract management
3. Compliance
4. Enterprise / Supplier development
5. Skills transfer and capacity development
6. Organisational efficiency and strategic alignment
7. Transparent procurement / Fraud reduction

For extensive discussions around the challenges identified in the survey, join us at the 2014 Smart Procurement World Conference: enjoy 7 conference streams and 2 exhibitions under one roof, including the Absa Enterprise Development Expo.