The pace of change, increasing uncertainty, and expectations for continued growth is forcing chief procurement officers (CPOs) to focus on managing risk, reducing costs, and creating value, according to Global Chief Procurement Officer Survey 2017, a new report from Deloitte.
Given these conditions, the traditional procurement operating model is in need of an overhaul as procurement organizations struggle to adapt to an environment of rapid digital innovation, according to Deloitte.
These trends are reflected in survey responses from 480 CPOs from 36 countries around the world. The consensus is that reducing cost is their highest priority, followed by risk management. Technology and talent are also top-of-mind issues for CPOs. Indeed, nearly 90% believe that talent is the single greatest factor driving procurement performance.
Solutions for improving the quality of the workforce will focus on acquiring new talent and building the capabilities of existing talent, according to Deloitte. However, new expertise may not mean adding employees. One option is crowdsourcing, which augments procurement capabilities without adding to headcount.
Rapid technological change is perhaps the biggest challenge many procurement organizations face. CPOs recognize that challenge, as a full 75% report that procurement’s role in delivering digital strategies will increase in the future. What’s more, 90% of CPOs surveyed say their industries will be disrupted by digital technology, but only 44% say they are adequately preparing for these disruptions.
Where will CPOs be spending their budgets to prepare for the future? Two-thirds of respondents surveyed say that analytics will have the most impact on their function in the next two years, while the impact of automation and robotics on their function will steadily increase over time.