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To tackle complexity at all fronts, CPOs need to change their lens on improving core value chains and organizational resources, tap transformational digital capabilities to revolutionize procurement, and become “complexity masters” to turn challenges into opportunities.
Trade wars. Climate change. Digital disruption. Talent shortages. Regulations.
Procurement organizations today are facing increasing complexity on all fronts. This complexity has only increased challenges for chief procurement officers (CPOs), who, in addition to delivering sourcing-centric cost savings, are also expected to enhance their influence with C-level peers and extend their business impact into strategic areas such as risk management, corporate development, and innovation. Yet more often than not, CPOs are asked to do all of this with fewer resources and thinner budgets.
“Complexity will only increase and creating value will only become more and more difficult over time ... better to be ready!”
— Anonymous CPO respondent
While many CPOs may feel like they’re ready to drown in a sea of complexity, they can still find ways to stay afloat—or even identify new opportunities to move their organizations forward. This report explores how CPOs can change their lens on improving core value chains and organizational resources, tap transformational digital capabilities to revolutionize procurement, and become “complexity masters” able to turn the risks apparent in complex business scenarios into value creation opportunities. Specifically, we examine procurement complexity in four areas:
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At the end of each section, we offer three key action items for CPOs as they consider how to tackle complexity within their own organizations, including a recommendation for “going digital” as part of a larger transformation effort.
Since 2011, the Deloitte Global Chief Procurement Officer (CPO) survey has been providing exclusive insights into the key challenges and opportunities shaping the course of procurement, serving as a global benchmark of sentiment about the function. These insights have, over the years, helped members of the C-suite, procurement leaders, business partners, suppliers, and supporting technology providers in furthering their ambition, strategies, and performance.
The 2019 survey was conducted in association with procurement market intelligence firm Spend Matters and Odgers Berndtson. In this year’s survey, 481 procurement leaders from 38 countries took part, representing organizations with a combined annual turnover of US$5 trillion.
In previous editions of the survey, we used a “high performer” methodology based on achieving savings targets and business partnering effectiveness, and then applied that metric to all firms in the report. In this year’s edition, we wanted to expand the performance measurement by making it more comprehensive and then applying it in the context of this year’s theme of complexity management. The “complexity masters” group is considered a set of procurement organizations that delivers: