When it comes to the maturity of procurement organizations, it’s Spend Matters' belief the majority are at the foundational, or basic level. It’s not a bad place to be, at least when it comes to starting a true procurement transformation, as Jason Busch, Spend Matters founder and head of strategy, points out in the research paper “Reframing Maturity Models: Empirical Perspectives On Radically Improving Procurement Performance.” Yet these procurement organizations should aim to reach other industry peers that are fully integrating source-to-pay processes with the supply chain, accounts payable, finance and other departments and leveraging advanced technology suites, platforms and networks.
The Procurement Research Category
Companies are increasingly using cost reductions to fund growth initiatives, according to Deloitte’s 2016 Cost Survey Report, a biennial survey looking at cost management and cost improvement trends among U.S.-based Fortune 1000 companies. Of the 210 senior executives surveyed for this year’s report, 57% identified gaining a competitive advantage over competitors and 43% pointed to investment in growth areas as the top drivers of cost reduction.
A new report from Deloitte and MHI identified the eight technologies enabling today’s “always-on supply chain” where supply networks continuously share information and analytics. These technologies, including widely used ones such as robotics, sensors and inventory optimization tools, can now provide a competitive advantage for companies, and in time, they will also become essential for business survival.
APICS and Michigan State University recently asked supply chain managers what burning issues were at the top of their mind. The results, published in the report “Supply Chain Issues: What’s Keeping Supply Chain Managers Awake at Night?,” show how supply chain professionals are taking on much more strategic role within their companies and tackling rising global supply chain complexities.
Deloitte Discusses Procurement’s Major Cost Reduction Effort in 2016, Shares Additional Insights from CPO Survey
We recently reached out to Deloitte to get its take on results of the consulting firm’s 2016 CPO Survey, which features insights from more than 300 chief procurement officers on the top issues they are tackling this year. Many of the CPOs in the survey pointed to cost reduction as a main focus for them. Today, Ryan Flynn, principal at Deloitte, answers our questions on how CPOs are tackling cost reduction in 2016 and what role technology is playing. You can also check out Part 1 of our conversation with Flynn, which focuses on what Deloitte found most interesting about its CPO survey results this year.
Most companies attempting a benchmarking effort consider questions around areas such as savings measurement, transactional compliance, procurement value contribution to the business, purchase order or invoice approval cycle time and the like. Many of these types of metrics are timeless and remain valuable. But taken alone, they often fail to capture how procurement’s overall contribution to the business is changing.
Deloitte Consulting recently released its 2016 Global CPO Survey, which features insights from 324 chief procurement officers from 33 countries on what key issues they are facing today. Cost reduction, trends in technology, improving relationships with suppliers and the growing talent gap were just some of the key focus areas these procurement professionals identified. To gain some additional insight on the survey’s findings, we reached out to Ryan Flynn, principal at Deloitte.
Procurement maturity is increasingly becoming holistic and integrated — as is procurement technology. No longer can we think of maturity models for various areas of the function (or the use and adoption of solutions) in silos. Step change improvement comes from thinking of the whole, not the parts or even the sum of the parts. In short, we must ideally think technology and process maturity in terms of end-to-end integration, including the overlap between buying, transactional connectivity, supplier management, supplier portal/connectivity, payment and more.
Every year or two, I put a ton of thought into a single research project or paper — and more nights and weekends than I care to think about. One such effort resulted in the recent Spend Matters Perspective, Reframing Maturity Models: Empirical Perspectives On Radically Improving Procurement Performance. In a series of posts starting today and exploring the findings on our site, I’ll share some of the highlights of what I learned in the process and the models themselves.
In my last post, I shared some provisional results from a research study that ISM and Spend Matters is currently conducting. So, what did we find out? Well, the results are still provisional, but the top-two areas where procurement practitioners said “agree” or “strongly agree” to the following positive statements are shown within. Unfortunately, a minority of procurement groups cited even the highest two scoring areas.
In part 1 of this series, I discussed the rationale for the Procurement-IT research study that I’m running in conjunction with the Institute for Supply Management, in preparation for the upcoming Global Procurement Tech Summit in Baltimore March 14–16. For most readers of this blog, I don’t need to explain the importance of having Procurement and IT being aligned, but if you agree that outsourcing and digitization (especially in the cloud) will continue as major trends, it’s a foregone conclusion. But, let’s see what procurement practitioners have to say, based on the first 150 validated responses in our data set, which is over 200 and growing.
Cost reduction is a main area of focus for procurement executives due to less optimistic economic and financial outlooks, according to the recently released 2016 Deloitte Global CPO Survey. However, the study pointed out that a growing number of companies are adopting innovative procurement technologies to increase efficiency in these uncertain times. This is the fifth annual CPO report from Deloitte, which surveyed more than 320 senior procurement leaders from companies in 33 countries — the largest sample size yet.