Deloitte’s CPO Study: Changing Chief Procurement Officer Behavior

Deloitte’s 2014 CPO survey helps to validate a number of evolutionary trends (e.g., decreased focused on savings) that those close to the procurement market are seeing. But it also goes a step further by exploring the different behaviors that top CPOs are engaging in. We’ll be exploring these behaviors and related findings from the analysis – as well as providing additional commentary – in the coming weeks. But in the meantime, I asked Deloitte’s Brian Umbenhauer, principal and US sourcing and procurement leader, and Ryan Flynn, principal, to share some of their perceptions on the study. (See also Part 1 and Part 2 of the interview.)

Spend Matters: If you were a CPO, what would you change based on the results of the survey?

Brian: First, become engaged in growth and innovation activities to find new ways for procurement to create value. Also, find a way to invest in teams and risk management practices (including technology investments) to help procurement teams capitalize on emerging opportunities. A focus on savings, total cost and keeping the proverbial supply lines up and running is not enough.

Spend Matters: Where does talent fit into the equation?

Ryan: We’re definitely seeing a lot of CPOs struggling to find the desirable talent to help them achieve their strategic objectives. Particularly as many clients are going after “next level” savings like demand management that require more stakeholder engagement and winning hearts and minds instead of wringing price concessions from suppliers, talent continues to come up as a critical issue for CPOs.

Spend Matters: What if you don’t want to build the talent internally?

Ryan: Related to the above, we’re seeing more organizations look at outsourcing procurement, and companies are increasingly considering outsourcing strategic sourcing and category management of indirects in order to fill talent gaps. In addition to outsourcing full processes, companies are looking to “out task” specific parts of the process – e.g., conducting supplier risk assessments as part of supplier on-boarding.

Spend Matters: Finally, what are your perceptions of risk management priorities based on the study?

Ryan: Despite the perception of risk decreasing that the survey picks up on, we’re seeing more companies across industries looking to identify, monitor and manage risk in their supply base. Risk is keeping many CPOs up at night for several reasons, including recent high profile data breaches, increased outsourcing in areas that touch sensitive internal and customer data and more global supply chains. A wrinkle on the latter is the recent sanctions by the US against individuals in Russia instead of against companies, which makes monitoring more difficult.

Spend Matters would like to thank Brian Umbenhauer and Ryan Flynn for taking the time to share their thoughts on the 2014 Deloitte CPO Study.

 

*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.

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