QUOTES

"The enablement of digital capabilities to aid decision-making and execution is allowing CPOs to build agile and digitally enabled procurement operations. Coupled with developments in AI and the speed at which it's advancing means that procurement is in a state of constant change. From basic process streamlining to driverless organisation enablement, AI is poised to help us make better, more data-driven decisions — and smart CPOs are paying close attention."

Jennifer Brown, Principal and supply chain procurement offering leader, Deloitte Consulting LLP

Orchestrators of Value versus Followers

To help transform value chains, enhance third-party management and maximise enterprise value beyond basic supplier cost reduction and risk mitigation, the CPO must take a leadership role in collaboratively building an enterprise capability of “orchestration.”

When comparing orchestration capability against value delivered, the 2023 survey found that the top quartile of CPOs has a 25 per cent performance advantage over their peers. These top quartile respondents were designated as Orchestrators of Value versus their peers, who were classified as Followers.

This year's study found that Orchestrators of Value focus on three main areas: procurement has seen a continued trend toward increased centralisation of key capabilities. CPOs can optimise operational models by standardising processes and policies, creating purposeful teams and using outside intelligence to inform their highest priority opportunities.

2. Talent strategy — By sourcing capabilities more widely and investing in sophisticated talent development strategies, CPOs can not only close capability gaps but also optimise for demand fluctuations, quality and cost.

1. Operating model design — Organisationally,

3. Digitisation maturity — To achieve successful digital transformation, CPOs must accurately define the value proposition that technology is intended to solve and the capacity for the broader procurement team to engage digitisation programmes in meaningful ways.

Looking forward: Top strategies to deliver value

What are CPOs focused on to deliver value amid an uncertain and complex global business environment?

The answer focuses heavily on suppliers. Both supplier collaboration (No. 1) and supplier renegotiation (No. 4) require strong category management, good data transparency and trust. These two top strategies also benefit greatly from advanced analytics and are enabled, in part, by the No. 2 strategy of digital transformation.

Arguably the greatest impact CPOs can have on cost and risk is in defining demand, alongside internal stakeholders and even external customers. By helping to shape the specifications, volume commitments and timing of purchases, CPOs can play an active role in proactively managing the procurement industry's current inflexion point.

For additional results from Deloitte's Global CPO Survey, read the full report here.

Source: Deloitte Consulting LLP