

Anticipating Economic Challenges Ahead? - 4 High Impact/Low Risk Strategies to Help You Navigate Them.
May 8, 2023
3 min read

Intro: Confidence in the Face of Potential Economic Headwinds?
Recently, BCG's (Boston Consulting Group) CEO Outlook Newsletter summarised the views of 759 C-level executives worldwide surveyed on their approach to reducing costs in the article 'What the C-Suite Says About Cost Cutting' (link below). With inflation, rising interest rates, and a the prospect of a potential recession looming, 73% of respondents confirmed that these concerns are top of mind. Yet, surprisingly 79% expressed confidence in their company's near-term prospects with over half planning to invest in innovation, primarily in technology and business models.
This confidence is due to four key strategies being adopted by those surveyed: redesigning processes and operational models, reducing indirect spending, simplifying organisation structure, and cutting direct spending. This article suggests high-impact, low-risk technology deployments to achieve these objectives.
How can the region adopt and benefit from these strategies?
In the Middle East, some organisations have adopted procurement technologies on par with the best international blue chips. However, many still conduct key processes manually, tying up experienced professionals in low value administrative tasks like tender/RFX management or sourcing low value/high volume common spend items. Streamlining and automating these processes can surface value quickly, and focus limited resources on value adding activities.
Consider that a saving in procurement spend has a greater impact on the bottom line, (often 5X) than that of the same amount added to the top line, (and even greater impact to a company's valuation if the bump in earnings is sustainable), we can start to see the importance and impact of an initiative to reduce spend and step-change the management of procurement processes. Let's examine some mature and proven approaches to delivering the four key strategies:
Strategy 1.  Redesigning processes and operational models:
Digital Sourcing & Contract Management tools streamline manual processes, increase competition, reduce the effort and timelines of running competitive tender programs, enhances supplier relationships and reduces leakage of negotiated savings.
Strategy 2. Reducing indirect spending:
Digital Catalogues & E-Procurement tools improve control of indirect spend and reduce margin leakage by eliminating maverick spending, directing spend to approved/negotiated contracts and enhancing visibility into purchasing patterns.
Strategy 3. Simplifying organisation structure:
Digital Sourcing technology automates manual processes allowing procurement teams to drive competition, negotiate  effectively and focus on value-added activities, fostering an agile and value focused procurement organisation.
Strategy 4. Cutting direct spending:
A program of reverse electronic auctions can swiftly improve business economics by fostering competition, driving down costs, and increasing transparency. Don’t believe everything you hear about e-auctions; they have become increasingly sophisticated in recent years and can manage complex categories and not just simple commodities. They are also one of the easiest and most impactful ways of step changing your economics, fast.Â
Conclusion
Investing in procurement technology where it matters most can provide significant returns. Reinvesting the gains for further business benefits can unlock additional value and create competitive advantage by initiating a virtuous circle of savings & improvements leading to further savings and improvements etc. etc.Â
If you have limited resources, that’s OK, it's beneficial but not critical to adopt all technologies at once, but it is essential to start somewhere and it’s smart to focus where the greatest impact lies. It is easier to start than ever; if you haven't deployed sourcing technology in your business this could be the time to act and improve your companies economics and resiliency if you find yourself facing difficult market conditions.Â
When you're looking to streamline your procurement processes and achieve savings, our proven procure-tech solutions can help. Whether you need to automate your purchasing workflows, manage your supplier relationships effectively, or gain better visibility into your spend, we've got you covered. We would love to connect and discuss how our solutions can benefit your business, you will find our contact details below for a complimentary consultation.
HERE is the BCG Article.Â
Thank you,
Dan & the TechConnectME Team.
About Dan
Dan is a co-founder at TechConnectME, he has over 20 years experience in the procurement and technology space, including leadership roles in some of the top tier technology providers. Dan has worked across the Middle East for 15+ years and is an MBA with further executive education in Digital Strategy (MIT), FinTech (Harvard), Leadership (Oxford) amongst others. You can catch Dan on his LinkedIn at: Dan Quinn or his email: Dan.Quinn@techconnectme.com.
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About TechConnect ME
TechConnect Middle East is procurement technology and professional services advisory firm based in the United Arab Emirates, we help clients across the Middle East solve problems, improve business outcomes, and discover new value. For a complimentary consultation, you can contact us at:
 Email: info@techconnectme.com
 Web: https://techconnectme.com
 LinkedIn: TechConnect Middle East