Deloitte CPO Survey part 3 – Technology To The Fore

In our last article reviewing the Deloitte 2016 CPO Survey we commented on the evidence that suggests CPOs are increasingly unsure about the ability of their own staff to display the skills and capabilities needed to deliver procurement objectives. Deeply worrying, we feel. Looking at the survey results around technology we see some further reasons for despair (in terms of the future of the profession) as well as some reasons for optimism and hope.

Some of the results suggest that CPOs simply don’t understand the seismic shift that is going on in the technology world or are getting confused about terminology.  Any major organisation will be using cloud-based technology, if not now, then very soon; except perhaps for those organisations requiring the very highest security levels. Yet supposedly only 45% of CPOs are investing in cloud-based computing, whilst 70% are investing in "self-service portals" - so are a major proportion of those NOT cloud based? Seems unlikely.

But this is another example of the problem we mentioned in an earlier article – without knowing what question was asked, how can we assess the significance of these numbers? So we don’t know exactly what was asked but we have a graphic headed “Comparison of innovative technology solutions being invested into support procurement activities” (a bit of a clumsy sentence too!) That shows:

70%  Self-service portals

45%  Cloud-based computing

42%  Mobile technologies

16%  Social media.

Then we see that only 40% of CPOs say “procurement has a clear digital strategy”, which seems low if so many are investing in portals. Is there some confusion as to what “digital” means? Do the CPOs perceive it as something different from routine IT systems? Then in another chart we see that the most likely areas to receive investment in next 12 months are spend analysis and contract management, which doesn't seem to quite stack up with that “self-service portal” vision being the highest priority.

However, the commentary in the Deloitte report is more interesting perhaps than the numbers in themselves. The writers see two parallel tracks of opportunity. In the more strategic or upstream procurement areas:

“Technologies like cognitive analytics, crowdsourcing and digital reporting are here to stay. Such tools could provide evidence based options for decision making, using advanced artificial intelligence to greatly improve accuracy and speed of execution”.

Meanwhile, we will see increased levels of self-service and automation in transactional and operational activities, although Deloitte think procurement will still be accountable for transactional activity (whilst we agree with their comments directionally, we’re not so sure about that). If CPOs re-balance their functions, focusing on “insight”, whilst reducing the focus on the operational aspects, that could successfully re-define procurement’s value proposition.

But if CPOs fail in either of those areas, then there may be problems. That’s not too far away from the  vision of the future and ideas outlined in our Future of Procurement paper, authored by Sigi Osagie and Peter Smith, and available to download via that link.

Summing up, there is no doubt that technology will be the biggest driver of change in procurement over the coming years, and Deloitte reflects that with some interesting thoughts on the subject. You can get the whole survey here and despite our slight frustration with the presentation and clarity of data, it is well worth reading.

Share on Procurious

First Voice

  1. Jonathan Betts:

    It’s interesting that we found similar results to Deloitte’s in our Procurement Trends Survey with a worrying decline in both talent and technology investment (although that followed a significant uptick in the prior couple of years).

    With regards to assessing the significance of results; the phrasing of the question, the question format, type and context, the survey methodology, the subsequent collation and interpretation all have an impact on the results.

    A case in point, one in eight respondents to the Procurement Trends Survey said they were reducing investment in procurement capability but only one member of an audience of 50-60 at our eWorld seminar yesterday indicated the same. Maybe our audience self-selected to more progressive, pro-investment types or perhaps the act of fessing up in public depressed the figures…

Discuss this:

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.