2023 Global Chief Procurement Officer Survey

For almost 12 years across 10 editions of the Deloitte Global CPO Survey, CPOs have talked about procurement getting a seat at the table. Following the COVID-19 pandemic and the unprecedented levels of supply chain disruption as well as the growing need for procurement to enable growth, mitigate inflation, and drive significant levels of value, that day has finally come.
 

Introducing the survey

As we reflect on the responses of nearly 350 senior procurement leaders from more than 40 countries, we have identified the attributes and capabilities that the most successful procurement organizations have invested in. There is a clear imperative to build agility and resilience into supply chains (and other functions), and more specifically, we have uncovered how leading organizations are effectively delivering across the broader value proposition that seems to get broader every year.

Generating value

Our latest survey illustrates how these top-performing procurement teams are increasingly working with business unit leaders, functional partners, and suppliers to empower their teams to become “Orchestrators of Value” and get everyone playing off the same “score.” We found three main areas that Orchestrators of Value focus on to successfully deliver on their commitments while addressing challenges and constraints:

• Operating model: Organizationally, procurement has seen a continued trend toward increased centralization of key capabilities. CPOs can optimize operational models by standardizing processes and policies, creating purposeful teams and using outside intelligence to inform their highest priority opportunities.
• Talent strategy: By sourcing capabilities more widely and investing in sophisticated talent development strategies, CPOs can not only close capability gaps, but also optimize for demand fluctuations, quality and cost.
• Digitization: To achieve successful digital transformation, CPOs must accurately define the value proposition that technology is intended to solve for and the capacity for the broader procurement team to engage digitization programs in meaningful ways.

Environmental, social, and governance (ESG) topics in increasing focus

ESG support is a critical C-suite issue for CPOs to support and one they should arguably be using to their advantage. It includes renewing ways to engage and collaborate with suppliers to balance cost, resiliency, ESG, and other factors.

CPOs must be proactive. All commercial firms measure financial profit, but 40% of CPOs stated their procurement organizations don’t define or measure their own set of relevant ESG factors, even though 60% do measure suppliers at some level on sustainability.

The big procurement focus seems to be on sustainability related to reducing emissions and waste: 62% of CPOs are targeting climate mitigation, but 72% are attacking waste reduction and material circularity that can help reduce costs and respond to market demand.
 

Protecting value

CPOs have definitively indicated that risk is here to stay, as evidenced by the greater than 70% in our survey who indicated that procurement-related risk/supply chain disruption has increased in the past 12 months on top of an already elevated baseline. Overall procurement and supply-related risks have continued to increase since 2021 study.

- Cost/spend risk (inflation) and supply shortages were the top two issues that had high or moderate impact over the past 12 months.

- Inflation risk is expected to continue and has surged to a “top 3” risk over the next 12 months.

- Only 25% of firms said that they could identify and predict supply disruptions in a timely manner “to a large extent”

The great news is that many procurement organizations are rushing to help address these issues—not only to help mitigate supply risks and fight inflation risk, but also to respond to new requirements such as environmental, social, and governance (ESG), now the No. 2 enterprise priority.
 

Looking forward

We anticipate that the global business environment will continue to be volatile, uncertain, complex, and ambiguous. Development of operating models, investment in and access to the necessary talent, and enablement of digital capabilities to aid decision-making and execution will likely differentiate those who win from everyone else. We anticipate the performance and capability gaps will grow between procurement organizations that can proactively manage this current inflection point and make the necessary investment in transformation and those that don’t.

During the fall, we will publish a blog serie where we deep dive into the themes of CPO study findings. If you are interested in this topic, please contact us and we will be happy to discuss and spar further.