Deloitte recently published its 2014 CPO survey, an annual quantitative analysis that we’ll be digging into on Spend Matters in the coming weeks. But before sharing some of the top findings and our own analysis, I thought I would go straight the source and ask the Deloitte team to highlight what stood out to them the most in the current report. Deloitte’s Brian Umbenhauer, principal and US sourcing and procurement leader, and Ryan Flynn, principal, took the challenge. In this multi-part series, we’ll be sharing some of the highlights from our discussion. Today, we start with Brian’s observations on what’s changed the most year-over-year.
Spend Matters: In looking at the survey results from 2013 and 2014, what changes stand out the most?
Brian: Its a few things. First, the talent gap is increasing. For the 2014 report, 57% of respondents said they felt their teams did not have required skills to deliver on the procurement strategy vs. 48% in 2013.
Second, the focus on cost reduction is decreasing. In the 2014 results, 69% said cost reduction was a specific business strategy compared to 79% in 2013, perhaps indicating increased focus on other growth-related strategies such as new products/services, markets (52%) and organic expansion (49%).
Third, the perception of risk is decreasing, as in 2013, 50% said risk increased somewhat or significantly compared to 42% in 2014.
And finally, procurement organizations are performing better against their savings plans, as in 2014, only 5% performed below plan compared to 7% in 2013 (no US respondents performed below plan in 2014 compared to 4% in 2013).
As we continue our discussion with Brian and Ryan, we’ll explore other key takeaways from the report and also delve into whether the results mirror what the Deloitte team is seeing in the field. For example, the study notes that less than “50% of CPOs are actually participating in growth activities such as new product development and supplier innovation.”
*As used in this document, “Deloitte” means Deloitte Consulting LLP, a subsidiary of Deloitte LLP. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.”