New ANZ procurement report highlights ESG as enabling procurement to take a more strategic role

For the second year running, more than 600 visionary procurement leaders from organisations across Australia and New Zealand (ANZ) have come together to discuss the future of procurement for a comprehensive research report. The study, 'Future-Focused Procurement: The Rise of ESG,' tracks evolving perspectives and industry changes, explicitly focusing on ESG, an increasingly significant requirement for procurement leaders.

A leading provider of sector-focused SaaS software, OneAdvanced commissioned The Research Agency - TRA, an insights consultancy. The study covers all the sectors OneAdvanced specialises in, including education, government, retail, manufacturing, distribution and healthcare.

According to Adam Bowles, Managing Director for Australia and New Zealand at OneAdvanced, the report delivers crucial insights into the evolving world of procurement with actionable strategies to address the substantial yet manageable challenges that procurement faces regarding ESG reporting.

"The report shows why ANZ's procurement leaders need to have a seat at the boardroom table. They are crucial for bridging the gap between ESG intentions and actions and are actively seeking guidance on effective ESG prioritisation and integration," said Adam Bowles.

The research identified that there's still uncertainty surrounding ESG practices and the integration of ESG within an organisation, shifting from strategy to practice and talk to action. ESG adoption was seen to be a moderate to high priority for 57 per cent of the organisations surveyed. However, 13 per cent did not know if ESG was a priority in their organisation and only 33 per cent had adopted ESG practices.

Damien Sheehy, Global Head of Procurement at Flight Centre, was one of the procurement leaders who participated in the in-depth interviews with TRA. He has seen the procurement function mature significantly in the past year, partly due to Flight Centre's focus on ESG.

"ESG is a competitive advantage in procurement, positioning companies to win more business," said Damien Sheehy, Global Head of Procurement at Flight Centre

The research found that the weighting between servicing and strategy in procurement has remained steady, with most procurement functions continuing to operate with a clear 60/40 split towards servicing. However, Australia had seen a much higher shift to a strategic capability than New Zealand, with 43 per cent for Australia and only 35 per cent for New Zealand.

Rohan De Silva, head of procurement at MECCA Brands, is another industry leader who has seen a significant shift in the perception of the procurement function within his organisation to a more strategic capability.

"As procurement evolves and matures, I expect it will transform itself from a back-office support function to a partner that also focuses on business development opportunities." Rohan De Silva, Head of Procurement, MECCA Brands.

The 2023 report showed that strengthening business outcomes was considered the most critical procurement action to be an optimal business partner. While this continues to be a top-five priority in 2024, it has been moved out of the top spot by the rising importance of improving efficiency and productivity.

" From managing suppliers, reducing risk and increasing efficiencies, the responsibility of procurement teams has shifted strategically. It is not just about what you spend; it's about how you spend it to drive better outcomes for your organisation," concluded Adam Bowles.

Other key findings from the research were:

1. Procurement professionals operating in a strategic capability are more satisfied (31 per cent) than those in a servicing capability (22 per cent). 
2. More than half of the organisations (58 per cent) have adopted compliance and ethics practices, suggesting that Governance is the most widely adopted ESG practice area.
3.  The ESG areas of the greatest importance, e.g., compliance and ethics, fair labour practices, and waste reduction, also have the largest gaps to action, at 19 per cent, 15 per cent, and 14 per cent, respectively.
4. The top five drivers for ESG adoption were 1. The right thing to do/want to at 37 per cent .2. Regulation/have to, at 33 per cent. 3. Leadership/inspired to at 32 per cent. 4. Improving operational efficiency/makes sense to, at 30 per cent and 5. Reducing reputational risk/need to at 29 per cent.

Download the https://www.oneadvanced.com/en-au/anz-procurement-report-2024/ full report to explore how ANZ's procurement leaders can drive innovation and deliver superior outcomes. Graphs and images to go with this report can be downloaded here.

About OneAdvanced

OneAdvanced is a leading provider of sector-focused software headquartered in Birmingham, UK, and has a multi-city presence across Australia and New Zealand, including Melbourne, Sydney, Brisbane, Perth, Adelaide, Auckland and Wellington. Its mission is to power the world of work through software that effortlessly gets the job done for its customers, giving them the freedom to focus on thriving for their customers, their people and the wider society. The company has expanded through organic and acquisitive growth, significantly growing its sector expertise and offerings. Customers trust OneAdvanced to deliver smart digitalisation through innovative, powerful technology and composable workflows that solve real business problems and provide intelligent insight. Its years of sector knowledge mean it is a strategic ally to its customers, and in turn, its technology touches the lives of millions of people every day. ANZ customers include NSW Health, Dunedin City Council, University of Queensland, University of Melbourne, Silk Contract Logistics and Iron Mountain, and its major UK customers include Virgin Money, Care England and the NHS. See: www.oneadvanced.com/en-au/