Cost reduction has always been the number one priority for procurement executives. It was no surprise when for 79% of the CPOs reducing cost was the first priority, as per the recent Deloitte CPO survey. However, what followed next was something new – 52% of the CPOs voted for “New Product/Market Development” as the next important priority, followed by organic expansion with 50% of CPO votes.
The Deloitte CPO survey gives a ring side view of procurement, from the eyes of the CPO. While CPOs are proud of their achievements with 88% having delivered or exceeded their savings plan, but with almost two thirds feeling they have been only somewhat effective at delivering value to their stakeholders.
What comes across clearly is that CPOs are looking at making big investment in technology. 58% envisage some analytics related technology investment in the next 12 months. While retrospective data analysis remains important, predictive analytics, creating insights, modeling capabilities, linking with market indices etc. are next on the CPO’s cards. Just like we’re used to user-friendly Amazon type user interface, or reviews from Trip Advisor, procurement technology is expected to get simpler and clearer.
Another important thing that has occupied the CPOs mind is – getting the right the procurement talent. With market for talent being constrained since last 12 months, getting individuals with correct skill set is becoming an uphill task. With 48% feeling their teams lack the skills needed to deliver their procurement strategy, procurement talent is one big challenge that CPOs will face in the coming time.
For detailed reading, I recommend you read the report “The Deloitte Global CPO Survey 2013”. It’s worth the time.