Digital Strategy and Talent Gaps: Insights from Deloitte’s 2017 CPO Survey

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Preparing for disruptive technologies and closing the talent gap are on many CPOs’ minds, as findings from Deloitte’s 2017 CPO Survey show. Another recent global survey from Deloitte and the MIT Sloan Management Review had found that 90% of executives think that digital technologies will disrupt their industries, but only 44% of them are adequately prepared.

Among procurement executives, 75% of respondents in this year’s CPO Survey said that procurement’s role in delivering digital strategy will increase in the future. Talent shortages are also a big concern, with 60% of respondents saying that they do not think their teams have the skills necessary for their procurement strategy.

Deloitte has been conducting annual surveys of CPOs since 2011, but this year’s survey is the biggest one yet, with 480 CPOs from 36 countries across the world participating. Manufacturing is the most well-represented industry, followed by energy and resources and then consumer business. Out of the total, 280 CPOs are based in Europe, the Middle East and Africa (EMEA), 109 in North America, 22 in South America and 67 in the Asia Pacific region. Two respondents’ locations were unspecified.

Show Me the Talent!

Considering that 60% of surveyed CPOs cited a talent shortage, perhaps it is unsurprising that investment in talent development and training has been stagnating. A quarter of respondents said that less than 1% of their budget was spent on training, compared with 2011, when only 5% of respondents said the same.

Where are these gaps then? According to the survey, leadership and digital skills are in particular demand.

Source: Deloitte 2017 CPO Survey

The largest skill gap for category managers and contract specialists is analytics, whereas presentation skills are the most in demand for sourcing specialists and procurement leadership. It is also worth noting that analytics is considered by 60% of respondents as the technological area that will make the biggest impact over the next two years.

To deal with the talent gap, 12% of respondents are considering outsourcing their procurement activities, a figure that has stayed relatively stable over the past five years. They’re also using a variety of sources to recruit new talent, from traditional recruiters to social networks to referrals from current employees.

The procurement department is also becoming younger, as more millennials — many armed with degrees in procurement and supply chain management — enter the workforce. A quarter of respondents said that millennials make up at least 40% of their procurement department.

So how can procurement get around the talent gap? Here are a few of Deloitte’s recommendations:

  • Create a digital culture by recruiting and training digital acumen
  • Automate repetitive procurement processes and outsource non-core tasks
  • Promote diversity in talent to boost innovation
  • Mentor and promote internal talent

Riding the Digital Wave

Artificial intelligence, automation, blockchain, crowdsourcing, machine learning, 3D printing — the era of digital procurement is here.

But is procurement ready? The biggest barriers that respondents named are the quality of data (49%), lack of data integration (42%), skills and capability of analytics resources (29%) and current technology (29%). Deloitte’s survey has found that a big challenge for CPOs will be ensuring that their investments are worthwhile, bringing both short-term and long-term value.

Currently, analytics are being used in negotiations (57%) and process efficiency improvements (56%), less so in supplier risk management (18%) and fraud detection (19%). CPOs also expected automation and robotics to transform procurement over the next five years, making procurement processes more efficient and freeing up capacity.

Source: Deloitte 2017 CPO Survey

A Regional Look

In conclusion, here’s a quick overview of how CPOs from different geographical regions responded.

Europe, Middle East and Africa (EMEA)

  • 58% report an improvement in savings performance
  • 77% cite cost reduction as their main priority
  • 62% think their teams do not have the necessary skills and capabilities

North America

  • 61% report an improvement in savings performance compared to last year
  • 84% cite cost reduction as their biggest priority, followed by risk management (61%)
  • 56% feel supported by executives, a higher figure than other regions
  • 57% think their teams do not have the necessary skills and capabilities

South America

  • 43% report an improvement in savings performance, 26% below the global average
  • Cost reduction, risk management and expanding into new markets or product lines are the three biggest priorities
  • 55% think their teams have the necessary skills and capabilities, significantly above the global average
  • ERP platform renewal is cited as the technological area that will deliver the most value, compared with other regions’ focus on analytics

Asia Pacific

  • 55% report an improvement in savings performance
  • 73% cite cost reduction as their main priority
  • 66% think their teams do not have the necessary skills and capabilities
  • More than 12% of organizations spend more than 4% of their budget on training, more than any other region

 

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First Voice

  1. Lance Younger:

    Lucy Harding and I share more on the Deloitte CPO Global Survey findings on Thursday 2 March at 9am register here for the webinar: http://bit.ly/2lOfZkV

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