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.

Risk

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.

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.

Endnotes

¹ Deloitte, Winter 2023 Fortune/Deloitte CEO Survey, 2023.