PHILADELPHIA, Oct. 31, 2013 (GLOBE NEWSWIRE) -- As 2014 budgeting gets underway, the continuing economic rebound and recovery in consumer and business confidence has many companies cautiously optimistic as they increase investments to position their firms for success. Although companies are opening their wallets, spending is prudent, focused on driving tangible returns and avoiding wasteful spending. However, some of the tumultuous events of this year, such as the recent fiscal standoff, have raised the level of risk-awareness in the C-suite and led to explicit initiatives to control and mitigate risk and protect margins, according to analysis released today.
Procurian's 2013 third quarter Spend Trends Report is based on analysis of data from billions of dollars in spend optimization projects undertaken in concert with the company's 100+ clients. Procurian helps the Fortune 1,000 optimize spend habits and save dollars that can be reinvested. Specifically, the report revealed the top areas of focus for cost savings and the global trends that are driving these discussions.
"Proper planning and market intelligence can make a world of difference when combatting external global factors affecting a company's cost margins," said Carl Guarino, CEO of Procurian. "From government shutdowns to labor strikes at our ports, the events of the past few years have served as a wake-up call to many in the C-suite that action needs to happen now to plan for the unforeseen in a rapidly changing world."
Procurian's top five spending and spend management trends for the third quarter:
- Skilled Worker Shortage Worries Many Industries: As the economy recovers, many industries are facing labor shortages, especially those requiring heavy math and science such as engineering and skilled labor critical to manufacturers. This problem is likely to compound as the recovery picks up steam in the next few years. Requests for Procurian to help clients source talent acquisition outsourcing services have grown nearly 50 percent over the last year. To that point, economic growth is also outpacing the available workforce of skilled industrial and commercial construction workers. Fortune 1,000 companies undergoing capital expenditure projects are finding it difficult to find enough suppliers with resources to competitively bid for jobs and resorting to breaking large projects into smaller pieces. While this type of split-bid strategy can be advantageous for some companies, Procurian warns that it requires much more up front planning and project management, as well as a strategic sourcing process.
- Distribution Networks Become Increasingly Strategic and Nimble: A surge in mergers and acquisitions has companies consolidating their supply chain networks, yet increasing demand is increasing for companies to compete with the Amazon factor and build direct-to-consumer capabilities. This trend has led to more companies carefully examining their logistics patterns to ensure they are able to manage more customers from fewer hubs while optimizing inventory levels. Procurian is helping clients evaluate logistics networks to improve items such as lowest fuel consumption, inventory and working capital, in preparation for possible direct to consumer operations. Logistics are also likely to be heavily impacted in the near future by the implementation of driver regulations including hours-of-service rules which may push rates higher and limit supply of available drivers and logistics capacity.
- CIOs Get New Job Functions Thanks to the Cloud: As Software-as-a-Service (SaaS) sees more rapid adoption, especially in areas like CRM, travel/expense and HR functions, the role of the Chief Information Officer is evolving dramatically. While SaaS relieves CIOs of some infrastructure requirements, the focus is shifting to complicated tasks that are increasingly important in managing hybrid SaaS/on-premise environments such as SLA management, data analytics, data integration, security and compliance.
- Corporate Travelers Get Carrots Not Sticks: In a new spin on the gamification trend, corporate travelers now get to choose their own adventure: increased comfort or cold hard cash. In the past, travelers had little personal skin in the game to minimize corporate costs at the expense of personal preferences other than following corporate policies. However, some Fortune 1,000 companies are revising policies to make compliance an explicit win-win. For example, fly coach instead of business class and receive $500. For a company with $5 million in travel spend, this one policy change can net savings of $1.3 million.
- Supply Chain Doomsday Prep Expands: From a drop in the world's energy supply in a natural disaster to major supply chain disruptions, savvy executives are seeking ways to better prepare in advance of "Black Swan" events. While impossible to predict, corporations are increasingly relying on intelligence and supply-side strategies to assess the potential risk factors facing their suppliers, and quantify the impact of quality issues, supply disruptions or worse that could affect ability to ship product, or result in unexpected mitigation costs. Unforeseen supply chain risks can cost tens of millions of dollars.
To read Procurian's full spend trends report covering marketing, direct materials energy and more click here: Procurian 3Q 2013 Spend Trends Report.
About Procurian Inc.
Procurian is the leading specialist in comprehensive procurement solutions. Forward-thinking business leaders partner with Procurian to transform procurement and drive sustainable changes to their cost structures. Global industry leaders, including Kimberly-Clark, Hertz, Symantec, Timken, and Whirlpool have chosen Procurian to accelerate this transformation. Procurian's built-out Specialized Procurement Infrastructure™ integrates with businesses to optimize spending and deliver real savings that equal a margin point or more. Procurian is an ICG (Nasdaq:ICGE) company. For more information, visit www.procurian.com.
CONTACT: Josh Merkin rbb Public Relations (305) 967-6667 / Josh.Merkin@rbbpr.com