2023 Global Chief Procurement Officer Survey has been saved
2023 Global Chief Procurement Officer Survey
Observations, challenges, and trends in procurement
What capabilities and strategies are today’s most successful procurement organizations investing in? See observations and trends from our 2023 Global Chief Procurement Officer (CPO) Survey—based on the responses of almost 350 procurement leaders from more than 40 countries.
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.
Introducing Orchestrators of Value
This 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:
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. To understand that trend, in the 2023 study, 43% of CPOs cited overall procurement risk had increased significantly as compared to 20% in the 2021 study.
- Cost/spend risk (inflation) (89%) and supply shortages (79%) 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” (63% “to some extent”).
- The loss of critical talent came in as the top internal issue, with 46% of CPOs citing it as a high or moderate risk.
- Internal complexity (e.g., organizational silos or nonstandard processes) was cited by more than 25% of CPOs as a “top 3” issue.
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.
Environmental, social, and governance (ESG)
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.
Survey responses from senior procurement leaders
Most impactful activity in the past 12 months?
“Elevate procurement and supply chain visibility and impact as a regular conversation/agenda item with the Board/CEO and full support behind transformation program.”
One thing keeping you up at night?
“How the operating model will need to adjust in 2023 to meet corporate challenges (i.e., budget) and still ensure high performance of function.”
One thing that most excites or energizes you about the year ahead?
“[Organizations are] desperate for highly effective procurement, and the senior leadership engagement is increasing with more and more traction across key business areas.”
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.
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Supply Chain & Network
Deloitte Consulting LLP