Skip to main content

The Global Chief Procurement Officer Survey 2018

Leadership: Driving innovation and delivering impact

For the past seven years, the Global Chief Procurement Officer Survey has provided a global benchmark of the sentiment or procurement leaders and an insight into the key themes and challenges facing procurement, including market dynamics, value and collaboration, talent and leadership, and digital procurement.

Over 500 procurement leaders from 39 countries representing organisations with a combined annual turnover of $5.5 trillion took part.

Overview

A clear shift in procurement focus towards innovation and value requires an acceleration in the pace of change especially in leadership, talent and innovation.

Procurement has continued to successfully deliver short-term savings and manage risk to support growth during a period of uncertainty. As the economy improves, procurement has a pivotal role to play in increasing supply chain transparency, accessing supplier innovation and delivering enterprise wide cost reduction. Exceptional procurement, supplier, business and digital leadership will differentiate those organisations that will make an impact that matters.

Key findings

  • Cost reduction (78%), new products/market development (58%) and managing risks (54%) remain the top business strategies for procurement leaders.
  • 61% of procurement leaders delivered better year-on-year savings performance than last year.
  • Supply chain transparency is poor, with 65% of procurement leaders having limited or no visibility beyond their tier 1 suppliers.
  • 73% of procurement leaders believe they have the support of their organisation’s leadership.
  • 51% of procurement leaders believe their current teams do not have sufficient levels of skills and capabilities to deliver on their procurement strategy.
  • The most common leadership traits in procurement are acting as a role model, collaborating internally and externally to deliver value and delivering results. Conversely, strategic leadership traits such as positive disruption, leading digital transformation and innovation are not widely evident.
  • 33% of procurement leaders believe that their digital procurement strategy will enable them to deliver on their organizational objectives and value.The extent to which modern technologies are used in procurement is low, with only one-third of procurement leaders using technologies such as predictive analytics and collaboration networks.
  • High performing procurement leaders out performed others in Executive Advocacy, Leadership, Strategic Decision Making, Talent Capability, Digital Procurement, Supply Chain Transparency and Balanced Scorecard capabilities.

Action starts here – leading in innovation and making an impact

One of the most significant opportunities for procurement leaders is to improve business, procurement, digital and supplier leadership. High performing organisations are delivering superior results and are excelling through:

  • Leadership with the business, enhancing executive advocacy and business partnering
  • Leadership in procurement, driving changes in talent, operational models and digital capabilities
  • Leadership with suppliers, through greater collaboration and supply chain cost and risk transparency
  • Recognising that focused and deliberate action is critical for procurement to be successful, this year’s report outlines a ‘To Do’ list linked to high performance to help accelerate existing and new procurement ideas, plans and results.

Regional overviews

Access our regional trends, and assess how your organisation compares to procurement functions across the globe

Market outlook

Year-on-year savings performance has improved with 70% of procurement leaders indicating better performance than last year – higher than the global average of 61%

Value and collaboration

23% of procurement leaders believe the effectiveness of their procurement function as a business partner is 'excellent'

Talent and leadership

The focus on technical procurement skills is dramatically larger in this industry than across the overall respondent population

Digital procurement

25% of procurement leaders believe that their digital procurement strategy helps procurement deliver on its objectives and improve enterprise value

Market outlook

Year-on-year savings performance has improved with 74% procurement leaders indicating better performance than in the previous year, compared to 61% in 2017

Value and collaboration

36% of procurement leaders believe that their procurement function is highly effective, and that procurement is highly regarded internally and seen as a key business partner contributing significant strategic value - significantly higher than the overall response of 24%

Talent and leadership

56% of procurement leaders believe their teams have the necessary skills to deliver on their procurement strategy. This is a huge improvement when compared to last year’s global average of 40%

Digital procurement

Only 18% of procurement leaders believe that their digital procurement strategy helps procurement deliver on its objectives and improve enterprise value.

Market outlook

Reducing costs continues to be the top priority for procurement leaders in this industry (89%)

Value and collaboration

The level of executive support seems to have fallen significantly, with only 35% CPOs feeling their executives are 'very supportive' in 2018, as compared to 50% last year

Talent and leadership

Only 22% of procurement leaders believe their teams have the necessary skills to deliver on their procurement strategy. This is lowest across all industries despite a higher-than-average spend on training in technical procurement skills

Digital procurement

Quality of data (61%), and not lack of data integration, is seen as the largest barrier to the implementation of digital technologies

Market outlook

Managing risks (81%) has now surpassed reducing costs as the industry’s key business strategy

Value and collaboration

The level of executive support in this industry seems to have dropped significantly, with only 33% of procurement leaders in 2018 feeling that their executives are 'very supportive', as compared to 47% last year

Talent and leadership

60% of procurement leaders believe their teams have the necessary skills to deliver on their procurement strategy.

Digital procurement

Many more CPOs (40%) attach importance to cybersecurity and data privacy compared with the overall average of 18%

Market outlook

Procurement leaders have differing views about savings performance: 50% indicated improvement on the previous year savings. This is significantly lower than the global average of 61%

Value and collaboration

Supplier performance and internal customer satisfaction (both at 78%) are the most important measures in procurement balanced scorecards for this industry

Talent and leadership

45% of procurement leaders believe their teams have the necessary skills to deliver on their procurement strategy, a significant increase from 27% last year

Digital procurement

Cloud computing (at 57%) is the most important technology area

Market outlook

Year-on-year savings performance has improved, with 70% of procurement leaders indicating better performance than last year

Value and collaboration

88% of the respondents say procurement team members are embedded in cross-functional teams to better understand internal stakeholder requirements. This is highest across all industries

Talent and leadership

44% of procurement leaders believe their teams have the necessary skills to deliver on their procurement strategy, continuing the trend of year-on-year increases since 2014

Digital procurement

Management reporting (53%) is the most leveraged use of analytics/data mining in this industry

Market outlook

Only 48% of procurement leaders in the manufacturing industry rated their 2018 performance better than last year. This is the lowest across industries, and below the overall average of 61%

Value and collaboration

Only 23% of procurement leaders feel 'highly supported' by their executives. This is the lowest across all industries

Talent and leadership

55% of procurement leaders believe their teams have the necessary skills to deliver on their procurement strategy.

Digital procurement

Quality of data (51%) is seen in this industry as the biggest barrier to the implementation of digital technologies

Market outlook

59% of procurement leaders rated their 2018 performance better than last year - slightly below the overall average of 61%

Value and collaboration

The level of executive support in this industry seems to have fallen significantly, with only 27% of procurement leaders in 2018 feeling their executives are 'very supportive', as compared to 42% last year

Talent and leadership

11% of procurement leaders in this industry have no formal training planned: this is higher than the overall average of 7%, indicating this may be an area for improvement in future

Digital procurement

35% of procurement leaders believe that their digital procurement strategy helps procurement deliver on its objectives and improve enterprise value

Did you find this useful?

Thanks for your feedback

If you would like to help improve Deloitte.com further, please complete a 3-minute survey