The Deloitte Global Chief Procurement Officer Survey 2017

Growth: the cost and digital imperative

Growth ambitions are high in an uncertain market, the pace of change and increased uncertainty requires superior levels of funding. Defensive strategies being implemented by Chief Financial Officers are demanding rapid, sustained cost reduction in parallel to a greater focus on risk from procurement. We are now sure that the traditional procurement operating model has to change. This has been driven by a lack of talent and an increase in digital innovation.

The Deloitte CPO Survey 2017: A Local Perspective

Schalk Human
Acting Chief Procurement Officer at National Treasury

Market Outlook: In a low-growth economic environment, a number of cost related strategies are key; cost reduction, cost avoidance, cost containment, aggregation with a view to lower unit costs, cost deferment and in extreme cases, cancelation of contracts. Risk management is of the essence given service delivery

Venkatesan Giridhar
Vice President Finance and Commercial at AngloGold Ashanti

Value & Collaboration: In the past there were no expectations from the procurement function. This function worked largely in a silo with the only expectation being just-in-time contracting and delivery, keeping in mind that there was no economic pressure at the time. We’re slowly moving towards value and optimisation. The desired future state is where organizational value is created through collaboration between cross-functional teams with appropriate vendor relationship management.

Appreciation to see procurement function as a value creator is paramount to its success.

Khutso Sekgota
Associate Director: Integrated Operations Delivery at Deloitte

Talent: Our clients are increasingly recognising that procurement skills are dependent on the operating model of the organisation in which they operate. When the organisation is structured in a transactional manner, the talent will also function in a transactional manner. CPOs need to invest more in strategic procurement skills and be expected to learn and benchmark themselves against global peers.

Rieta De Villiers
Associate Director: Technology Enablement at Deloitte

Digital Procurement: Those CPOs who accelerate the adoption of predictive and cognitive analytics will enable end-to-end supply chain visibility and start using their data to drive decision-making. The majority of CPOs are already thinking about how to augment their existing tools by leveraging the cloud, analytics and robotics. The challenge for them will be ensuring that their investments are well spent.

Key findings:

  • 79% of procurement leaders to focus on cost reduction, and 48 per cent want to increase cashflow;
  • Almost six in ten see managing risks as a priority;
  • 52% of procurement leaders are focused on new products, services and market development;
  • Executive support for procurement change exists for 75 per cent of procurement leaders;
  • The majority of CPOs rate their current effectiveness of business partnering at less than 70% and have an ambition for future effectiveness to be greater than 90%; 60% of CPOs do not believe their teams have the skills to deliver their procurement strategy
  • 25% spend less than 1% of their budget on training
  • 75% of CPOs believe that procurement’s role in delivering digital strategy will increase in the future
  • Analytics will have the largest impact for over 65% of procurement leaders

How Deloitte can help you:

We have experience in executing business processes by partnering with high impact clients to protect and increase their value and provide solutions that free them up to focus on their unique vision.

Our solutions are underpinned by Deloitte global best practice outsourcing methodologies and the latest technological advancements in the industry. Deloitte is a trusted business on the African continent with a solid input, and thus can help clients navigate the markets and address actual and perceived risk.

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