Deloitte CPO Survey (Part 2) – Skills and Capabilities Crisis?

So having had a bit of a dig in part 1 about some of the way data is presented in the Deloitte CPO Survey, today let's return with a more positive frame of mind and report on some of the findings. But our positive mood may not last beyond one of the headline findings (and we're not blaming Deloitte for this). The survey suggests that 62% of CPOs don't think their teams have “the skills and capabilities to deliver their procurement strategy”.

The most dramatic aspect of that figure is that it has increased from 48% just two years ago. Unfortunately, there is no further data around this fairly startling increase. The report does provide some commentary on these issues; Lucy Harding of Odgers (who worked with Deloitte on the report) says the “skills gap in many cases is around broader business acumen rather than technical procurement competence”.

But we would have liked to ask the CPOs three further questions on this;

- which skills and capabilities specifically do you feel you are lacking?

- if you feel this is a bigger problem than it was two years ago, why are things getting worse?

- what are you doing about it?

These are the critical questions really. For example, if the rapid changes in technology (covered in another part of the report) mean that procurement staff are not keeping up with the latest in that area, then that is relatively easily solved with some technical training and education. However, if it is lack of inter-personal and business skills, affecting the ability of procurement to collaborate with suppliers and gain credibility as business partners from internal stakeholders, which seems to be Harding’s hypothesis, then this is a tougher problem to solve.

And if that is the case, then more data from the report adds to the concern. Spending on training is on the decline apparently, with 30% of respondents spending less than 1% of the function's operating costs on training and development. That might also take us into a debate about whether organisations are valuing procurement - or perhaps the issue is they don't value training?

The final of our three questions above is perhaps the most important. We would like to think that the CPO population is addressing this issue with a whole range of innovative and effective options for recruiting, retaining and developing the right talent. But are they? Or are they in passive mode, allowing their bosses to cut training budgets, putting out standard adverts and bemoaning the lack of good candidates, whilst their star performers drift off to better, bigger, more rewarding (in every sense) roles?

We will come back to other aspects of the survey shortly, and it is worth saying that Deloitte’s overall prognosis for the profession is positive. Digital disruption may lead to new ways of working which could take the pressure off in terms of this skills shortage, they suggest.

But disruption could also exacerbate the problems and we believe there are real dilemmas here beneath the surface for many CPOs and therefore for procurement more widely. Because if 62% of organisations really don't have procurement people and teams who can deliver their own strategies, then this is a profession in some sort of crisis. In which case, perhaps our generally positive prognosis in the Spend Matters "Future of Procurement" paper will turn out to have been overly optimistic.

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Voices (2)

  1. life:

    In addition, there is a percieved skills gap because the purpose of procurement is not, in the reality of the business world, well defined or universally applied or agreed.

    Unless people are careful the function also has a tendancy to overreach itself and get involved in areas that are beyond a reasonable procurement scope. Like every other business function I’d say, yes, there is often a skills gap but actually the percieved issue is more the symptom of over extension.

    The report’s not helped by “we’ve totally drunk the kool aid” gush such as “Is your procurement function ready to embrace the digital revolution?” / “..embrace the digital storm” etc. Who writes this stuff? Does anyone think this sort of language is useful or actually sells services?

    Just off to hone my soft skills in order to overcome this morning’s “caffiene tipping point”…

  2. bitter and twisted:

    Only 62%?

    There should be a skills gap when you are trying to change things. Otherwise you are an idiot for not having done it already.

    And i suspect many ‘strategies’ are buzzword mash-ups so the ‘skills’ required are unrealistic anyway. )

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