The Global Agenda — It’s Coming!

One of the key takeaways from Hackett’s 2012 Procurement Agenda is Globalization and Global Operating Models. Why? The Hackett Group 2011 Key Issue Study found that not only is globalization critical for enabling revenue growth but the level of planned transformation over the next two to three years is such that the respondents’ ambitious plans will nearly triple today’s level of globalization within two to three years. Wow!

Within three years, the percentages of organizations with the following key activities at the maximum global level achievable is expected to enter the double digits almost across the board. Specifically, Hackett expects to see the following improvements:

Activity Current Saturation Projected Saturation
Development/Management of Product/Service Lines 4% 11%
Go-to-Market Strategy 6% 13%
Supply Chain 6% 13%
Organizational Culture 4% 8%
Internal Operations 3% 11%
Average 4.60% 11.20%

So what does this mean to your (Supply Management) organization? First of all, it is going to be a tough fight if the organization’s goal is to be world class in Hackett’s rankings, as only 8% of organization’s make the cut and over 11% of organizations will be leading in the globalization of their core activities.

Second, the organization, and each professional in the organization, is going to have to brush up on its CQ (Cultural Quotient). Not an easy task, as chronicled in SI’s series on Overcoming Cultural Distances in International Trade and Cultural Intelligence, but a necessary one.

Third, as Hackett points out, supply chain flexibility is going to have to increase. Disruptions and disasters are pretty much guaranteed at least every 12 and 24 months, if not every 6 and 12 months, the changing regulatory landscape will throw a wrench into the organization’s best-laid plans, and demand surges will play havoc with traditional shipping lanes and practices.

Fourth, selling into a given country is going to be as important as buying from the given country as the need to be perceived as a truly global organization, and not just an American or British back-office, will be real for those organizations that want to attract the best talent.

Fifth, attracting and retaining top talent will be more critical than ever as the complexity of tomorrow’s global sourcing will be much more involved than the complexity of today’s.