Building a digital-ready Procurement team – Latest study reveals how to become Agents of Change

Now in its 12th edition, the Deloitte Global CPO Survey launches today under the banner Agents of Change: Procurement’s Big Bet On Digital. Displaying the results of responses from 265 senior procurement leaders from more than 40 countries (and 12 industries), the report reveals procurement’s continuing push toward enterprise-aligned digital transformation, with ‘Digital Masters’ leaning toward a disciplined generative AI approach to help achieve the omnipresent holy grail of cost reduction and operational efficiency. 

For the fourth consecutive year of co-authoring this study, our chief research officer, Pierre Mitchell, has contributed his expertise as procuretech analyst and advisor to help craft the ongoing study and identify what the aggregated responses mean in reality for procurement, the increased demand for its services, and the organization at large. 

This year’s findings present a picture among ‘Digital Masters’ of a decisive upswing in investment in procurement technology to the tune of 20% of their budget – nearly twice that of 2023. Pierre attributes these masters becoming ‘agents of change’ to “making smart bets on a portfolio of iterative self-funding cross-functional projects.” 

“These projects go beyond traditional enterprise resource planning (ERP) and source-to-pay (S2P) transformations,” he says, “to improve broader enterprise capabilities, such as third-party risk management (TPRM), tariff management, commercial management and the underlying technology-enabled process orchestration, analytics and data management to power them.”

The study provides an in-depth look at how AI is proving the advantage for the top performers. The ‘digital masters’ are demonstrating superior outcomes across all performance metrics, including cost savings, stakeholder influence and satisfaction, and risk management. Digital literacy, plus the ability to leverage emerging technologies like GenAI, advanced analytics and emerging agentic capabilities, are delivering measurable returns:

“Orchestrators of value achieved an average 2.8x return on Gen AI investments, while ‘followers’ saw only 1.6x.”

The report presents not only how ‘digital masters’ (who are also top performers) are reaping value from automation and AI to help manage workloads, it provides insights into how they are using next-generation technology for the right applications. The following graphic from the study illustrates the clear correlation between digital mastery and overall procurement performance:

Following the path from the GenAI revolution in procurement to citing GenAI use cases and the payout from them, the survey shows that those ‘digital masters’ who do invest in talent and digital tools consistently outperform the ‘followers’ across all performance metrics. For example: 

• In terms of cost savings: 96% met or exceeded the plan vs. 80% of followers
• For supplier performance: 84% met or exceeded plan vs. 59% of followers

It then offers structured advice on how to become ‘digital-ready’ and looks at the need for digital literacy in procurement teams of the future, identifying top talent development priorities. 

“CPOs,” it finds, “must help their organizations safely capture the power of increasingly digital supply markets by working with them to simplify and automate lower-value processes and making sure that people have the skills to deliver higher strategic value. Key to this transformation is the emerging power of GenAI and agentic AI.”

It advises that to become an agent of change CPOs need to focus on the transition capabilities from human to digital, being deliberate and opportunistic in funding approaches and hedging bets by leveraging third-party managed services with superior capabilities. It goes deeper into the deployment of each of these. 

Once ROI is calculated and measured, payouts must be protected and sustained. The report looks at the evolving risk landscape and offers risk mitigation strategies. For example, in a volatile market the survey finds that:

• Almost three quarters of CPOs identified active alternative sources as the most effective mitigation strategy. More than two-thirds prioritize greater visibility into the supply chain and two-thirds on enhancing supplier information sharing and collaboration.

A final look at CPO accomplishments, their concerns and their vision for the future concludes the report with highlights on the shifting business strategies since the last survey in 2023. 

It sums up with this advice:

“This year’s CPO survey clearly demonstrates procurement’s value and the comparative financial advantage of the ‘orchestrators of value. Its results make a compelling case for procurement organizations to become true agents of change with the adoption of agentic workflows and eventually true autonomous AI agents. Organizations that use this opportunity to rethink their operating and talent models to take advantage of the added efficiency and insight will see the biggest payout.” 

It also supplies a helpful list of self-reflective questions that can help CPOs position themselves to become agents of change.’ 

The full report can be downloaded here for free
For any queries or discussion points arising from this year’s survey insights, please direct your comments to the author (pierre@spendmatters.com).