Leadership: Driving innovation and delivering impact

Leadership: Driving innovation and delivering impact
Leadership: Driving innovation and delivering impact
The Deloitte Global Chief Procurement Officer Survey 2018   Consulting
Leadership: Driving innovation and delivering impact
Leadership:
                                  Leadership: Driving
                                              Driving innovation
                                                       innovation and
                                                                  and delivering
                                                                      delivering impact
                                                                                  impact|| The
                                                                                            The Deloitte
                                                                                                Deloitte Global
                                                                                                         Global Chief
                                                                                                                Chief Procurement
                                                                                                                      Procurement Offi cer Survey
                                                                                                                                  Officer  Survey 2018
                                                                                                                                                  2018




Introduction                        Introduction
Executive summary
                                    Welcome to the annual Deloitte Global Chief Procurement
                                    Officer (CPO) survey. For the past seven years, our survey
Market outlook
                                    has provided a global benchmark of the sentiment of
                                    procurement leaders and an insight into the key themes and
Value and collaboration
                                    challenges facing procurement, including market dynamics,
Talent and leadership
                                    value and collaboration, talent and leadership, and digital
                                    procurement.
Digital procurement
                                    The survey was conducted in association with Odgers Berndtson. Five hundred and four
                                    procurement leaders from 39 countries took part, representing organizations with a combined
                                    annual turnover of $5.5 trillion.
Action starts here
                                    Whether you are a member of the C-suite, a procurement leader, business partner,
Industry and regional overviews     procurement practitioner or supplier, we hope that you will find this report valuable
                                    for further developing your ambition, strategies, and performance.


About the participants              We would like to thank the many executives who have contributed their time and insights
                                    for this survey. We look forward to continuing the journey with you.


Acknowledgements


Regional and country contacts


Further insights
                                    Brian Umbenhauer                                           Lance Younger
                                    Global Head of Sourcing & Procurement                      EMEA Head of Sourcing & Procurement
Endnotes                            Principal                                                  Partner
                                    Deloitte Consulting LLP                                    Deloitte Consulting MCS


                                    Watch Brian and Lance talk about the survey findings

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Leadership: Driving innovation and delivering impact
Leadership: Driving innovation and delivering impact | The Deloitte Global Chief Procurement Officer Survey 2018Leadership: Driving innovation and delivering impact| The Deloitte Global Chief Procurement Officer Survey 2018




Introduction                      Survey findings at a glance
Executive summary                  1                                                                                       5


                                              78%                       58%                       54%                          73% of procurement believe they have the support of their organization's leadership
Market outlook


Value and collaboration
                                         Cost reduction       New products/market           Managing risks
                                                                 development
Talent and leadership
                                       Remain the top business strategies for procurement leaders
                                   2                                                                                                                                                      6
Digital procurement                                                                                                        4
                                       61% of procurement leaders delivered better year-over-year
                                                                                                                                                               Overall supply chain transparency is poor with
                                       savings performance than in 2017                                      Only one in four
                                                                                       Pages from print document to be inserted, and centred here at 100% scale...
Action starts here                                                                  23.5%                    procurement leaders
                                                                                                                     (297x210mm)
                                                                                                             believe they are
                                                                                    Worse than last year
                                                                                                             excellent business
Industry and regional overviews                                                     9%                       partners contributing                             of procurement leaders
                                                                                    The same as last year    significant strategic
                                       Better than last year                                                                                                   having limited or no
                                                                                                             value                                             visibility beyond their
About the participants                                                                         6.5%
                                                                                                                                                                                              Tier 1 suppliers ...
                                                                                               No formal
                                                                                               performance tracking
Acknowledgements
                                   3


Regional and country contacts          Procurement leaders are primarily focused on specific procurement levers to deliver value over the next 12 months



Further insights


Endnotes                                                        Consolidating                                Reducing total life                               Increasing                               Specification                          Reducing total
                                                                spend                                        cycle/ownership costs                             competition                              improvement                           ownership costs




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Leadership: Driving innovation and delivering impact
Leadership: Driving innovation and delivering impact
                                                                                                                                                                                                                                       impact | The Deloitte Global Chief Procurement Officer
                                                                                                                                                                                                                                                                                      Officer Survey 2018




        Introduction


        Executive summary                        7                                                                                        8       The most common leadership traits in procurement are ...

rganization's leadership
                                                     51% of procurement leaders believe their teams
                                                                                                                                                             Acting as a role model                     Collaborating internally and externally to deliver value                                                    Delivering results
                                                     do not have sufficient capabilities to deliver on their
        Market outlook                                                                                                                                                                  23%                                                                                                20%                      14%
                                                     procurement strategy

                                                                                             2017
        Value and collaboration
                                                                                    60%              40%
        Talent and leadership
                                                                                             2018

        Digital procurement                                                         51%              49%
                                                                                                                                                                                                                                                                    6%
ly chain transparency is poor with
                                                                                                                                                                                                                                         5%
                                                                                                                                                                                                                                   Leading                                                       Innovation 8%
                                                 9                                                  Pages from print document
                                                                                                                 Conversely,          to be inserted,
                                                                                                                                 strategic       leadershipand      traitscentred
                                                                                                                                                                              such as... here at 100%  Positive   scale... digital transformation
        Action starts here
                                                                                                                                            (297x210mm)                                                disruption                                                                        ...are not widely evident
                                                     33% of procurement leaders believe that their digital
                                                                                                                 10
                                                     procurement strategy will enable them to deliver on their
        Industry and regional overviews
ent leaders                                          objectives and value                                               010101010000111001001011001000010110101010100001110010010110010000101101010101000011100100101100100001011010101010000111001001011010100001110010010110010000101101010101000011100100101100100001011

d or no
ond their
ers ... About the participants


        Acknowledgements                                                                                                                                  010101010000111001001011001000010110101010100001110010010110010000101101010101000011100100101100100001011010101010000111001001011010100001110010010110010000101101010101000011100100101100100001011



                                                                                                                                                          ... is expected to have the most impact on procurement in the next two

        Regional and country contacts                                                                                                                     11

                                                                                                                                                               Modern technology usage is low,
        Further insights                                                                                                                                       with only one-third of procurement
                                                                                                                                                               leaders using technologies such
                                                                                                                                                               as predictive analytics and
cificationEndnotes              Reducing total                                                                                                                  collaboration networks
rovement                       ownership costs




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Leadership: Driving innovation and delivering impact
Leadership: Driving innovation and delivering impact | The Deloitte Global Chief Procurement Officer Survey 2018Leadership: Driving innovation and delivering impact| The Deloitte Global Chief Procurement Officer Survey 2018




Introduction                      Executive summary
Executive summary
                                  A clear shift in procurement focus toward                                               High performance
                                                                                                                          capabilities
                                  innovation and value requires an acceleration                                                                 Executive                                                                Leadership
Market outlook                                                                                                                                  advocacy
                                  in the pace of change especially in leadership,
Value and collaboration
                                  talent, and digital procurement.

                                  Procurement has continued to successfully deliver short-term savings
Talent and leadership             and manage risk to support growth during a period of uncertainty.
                                  As national and global economies improve, procurement has a pivotal
                                  role to play in increasing supply chain transparency, accessing supplier
Digital procurement               innovation, and delivering enterprise wide cost reduction. Exceptional    Balanced                                                                                                                                    Strategic
                                  procurement supplier, business, and digital leadership will differentiate  scorecard                                                                                                                                   decision
                                  those organizations that deliver an impact that matters.                                                                                                                                                               making
                                                                                               Pages from print document to be inserted, and centred here at 100% scale...
Action starts here
                                                                                                                             (297x210mm)
                                  Our research on high-performing procurement leaders shows that there
                                  are seven key capabilities where high performers out performed other                100         75         50        25                                                 25           50            75           100
Industry and regional overviews   procurement leaders:

                                  • Executive advocacy
About the participants
                                  • Leadership – supplier and procurement

                                  • Strategic decision making
Acknowledgements
                                  • Talent capability                                                                     Supply                                                                                                                     Talent
                                                                                                                           chain                                                                                                                   capability
Regional and country contacts                                                                                          transparency
                                  • Digital procurement

                                  • Supply chain transparency
Further insights
                                  • Balanced scorecard

                                  In comparison to last year, high-performing procurement leaders continue                                                                                                             High performers are defined as those
Endnotes                          to focus on executive advocacy, strategic decision making, talent capability,
                                                                                                                                       Overall average
                                                                                                                                                                                                                       procurement leaders who delivered
                                  and digital procurement. Three new capabilities that differentiate high                                                                                                               better savings than last year and are
                                                                                                                                       High performer
                                  performance from the average have also emerged this year: leadership,                                                                                                                more effective at business partnering.
                                                                                                                                                                                Digital procurement
                                  balanced scorecards, and supply chain transparency.


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Leadership: Driving innovation and delivering impact
impact| The Deloitte Global Chief Procurement Offi
                                                                                                                                     Leadership: Driving innovation and delivering impact                                         Officer
                                                                                                                                                                                                                                      cer Survey 2018




Introduction


Executive summary


Market outlook


Value and collaboration           Value and collaboration                                            Talent and leadership                                             Digital procurement
                                  Procurement alignment to executive and business priorities,        Over half our survey respondents believe their teams do not       The proliferation of digital tools and applications will likely
                                  measured through mutually agreed performance metrics, will         have the necessary skills to deliver their procurement strategy,  continue to grow in importance and impact for procurement
Talent and leadership             likely continue to enhance the effectiveness of procurement         and the recruitment market is becoming more challenging;          leaders. In order to stay relevant within the business,
                                  as a strategic business partner. However, the continuing fall in   yet there is less spent on training and deployment of talent      procurement needs to wake up to the reality that now confronts
                                  use of supplier collaboration as a lever for delivering value is a development strategies. Planned training on “softer skills” such  it. Progress and adoption has been slow over the past year and
Digital procurement               concern, especially given the increased focus on the contribution  as business partnering and emotional intelligence, as well as on  the survey findings show that procurement leaders remain
                                  of procurement to product/market development and innovation.       digital skills, points to a reduced focus on training in 2018.    hesitant about investigating new digital tools and technologies
                                  Furthermore, our findings show that many organizations arePages from print document to be inserted, and centred here at 100% scale... such as artificial intelligence, robotics, and blockchain. Digital
Action starts here                leaving themselves exposed to potential supply chain disruption    What is clear is that there (297x210mm)
                                                                                                                                   is a direct correlation between     supply networks are evolving, connecting all parts of the
                                  and margin erosion by having limited visibility of their supply    stronger leadership capabilities, higher spend on training,       supply chain, and insight-driven organizations are applying
                                  chains beyond the first tier. Improved transparency of pricing,     and enhanced performance. This is also true of leadership at      advanced analytical capabilities to enhance performance. Digital
Industry and regional overviews   supplier locations, and critical dependencies can help             suppliers. So, the question must be asked why procurement         transformation is inevitable and high-performing organizations
                                  procurement functions deliver greater value while avoiding         leaders are not focusing more on talent and leadership capability are leading the way on adoption.
                                  potentially significant regulatory, reputational, and               development.
About the participants            operational risks.
                                                                                                                                                                             Digital transformation is
                                                                There is a direct correlation
Acknowledgements
                                  Improved transparency of                                                                                                                   inevitable and high-performing
                                                                between stronger leadership
                                  pricing, supplier locations,                                                                                                               organizations are leading the
Regional and country contacts
                                                                capabilities, higher spend
                                  and critical dependencies can                                                                                                              way on adoption.
                                                                on training, and enhanced
Further insights
                                  help procurement functions
                                                                performance.
Endnotes                          deliver greater value.


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Leadership: Driving innovation and delivering impact| The Deloitte Global Chief Procurement Officer Survey 2018


                                  Leadership: Driving innovation and delivering impact | The Deloitte Global Chief Procurement Officer Survey 2018



Introduction


Executive summary

                                                    Market outlook
Market outlook


Value and collaboration


Talent and leadership


Digital procurement


Action starts here


Industry and regional overviews


About the participants


Acknowledgements


Regional and country contacts


Further insights


Endnotes




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Leadership: Driving innovation and delivering impact
Leadership: Driving innovation and delivering impact
                                                                                                                                                                                   impact | The Deloitte Global Chief Procurement Officer
                                                                                                                                                                                                                                  Officer Survey 2018




Introduction


Executive summary
                                  The world economy enters 2018 with good momentum. Japan and the EU are                                                                    Chief financial officers (CFOs)1 recently surveyed by Deloitte
                                                                                                                                                                            indicated that with global inflation pressures easing in most
                                  in better shape than for many years. Unemployment has fallen across the world.                                                            regions, their focus is shifting toward the longer term as
Market outlook
                                  Financial markets have been in ebullient form, with equities hitting new highs.                                                           revenue growth improves. Growth is gaining priority for CFOs,
                                                                                                                                                                            whether organically, or through acquisitions, introducing new
                                                                                                                                                                            products/services, or moving into new markets.
Value and collaboration           Prioritization of business strategies over the next 12 months

                                               78%                                    58%                                    54%                                            The views of CFOs are in alignment with those of procurement
                                                                                                                                                                            leaders – especially new product/market development – with
Talent and leadership
                                                                                                                                                                            58 percent identifying that as a priority, an increase for the
                                                                                                                                                                            second year in a row.
Digital procurement
                                                                                                                                                                            Cost reduction continues to be the
Action starts here
                                                                                           Pages from print document to be inserted, and centred here at 100% scale...      number one priority for procurement
                                                                                                                         (297x210mm)
                                           Reducing costs                New product/market development                   Managing risks
                                                                                                                                                                            leaders, with 78 percent of respondents
Industry and regional overviews                48%                                   40%                                    34%                                             in our survey identifying reducing cost
                                                                                                                                                                            as their top priority strategy. Year-over-
About the participants                                                                                                                                                      year savings performance has improved
                                                                                                                                                                            from 58 percent of procurement
Acknowledgements                                                                                                                                                            functions in 2017 to 61 percent in 2018.
                                         Expanding organically                 Increasing cash flow           Managing corporate social responsibility
                                                                                                                                                                            The slight improvement in economic sentiment has not altered
Regional and country contacts                                                                                                                                               the overall willingness of businesses to take on additional risk.
                                               22%                                   20%                                       9%                                           As ever, risks remain, from Brexit in Europe, to protectionism
                                                                                                                                                                            and the perils of asset and credit bubbles. UK growth has
Further insights                                                                                                                                        Strong priority
                                                                                                                                                                            conspicuously slowed, particularly in comparison to many other
                                                                                                                                                        Somewhat priority   countries that are enjoying the global upturn.

Endnotes                                                                                                                                                Not a priority




                                     Increased capital expenditure           Expanding by acquisition                   Disposing of assets



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Leadership: Driving innovation and delivering impact
Leadership: Driving innovation and delivering impact | The Deloitte Global Chief Procurement Officer Survey 2018Leadership: Driving innovation and delivering impact| The Deloitte Global Chief Procurement Officer Survey 2018




Introduction


Executive summary
                                  Procurement risk levels, while still                                                                                            Respondents reporting a significant resurfacing of procurement risk

                                  high, appear to be being managed.
Market outlook
                                  The overall global macroeconomic
Value and collaboration
                                  risk ratings from procurement leaders
                                  has fallen, with lower risk ratings for
Talent and leadership
                                  a China slowdown, credit conditions,
                                                                                                                                                                                      49%




                                                                                                                                                                                                     %
                                  the Eurozone economy, and




                                                                                                                                                                                                     33
                                                                                                                                                                                                                45%
                                  worldwide terrorism.
Digital procurement                                                                                                                                                                                                     50%         47%
                                  Procurement leaders continue to keep a close watch on global                                                                        2018 2017 2015 2014
Action starts here                macroeconomic risks, with the top three being:

                                                                                                             Most significant market risks
                                  • uncertainty and outcomes of trade negotiations, e.g. Brexit,
Industry and regional overviews     NAFTA
                                                                                                                      Uncertainty and outcomes of trade                                                                                     33%
                                                                                                                         negotiations, e.g. Brexit, NAFTA                                                                                   33%
                                  • weakness and/or volatility in emerging markets and rising
                                                                                                                   Weakness and/or volatility in emerging                                                                       29%
About the participants              geopolitical risks in the Middle East/Asia                                     markets and rising geopolitical risks in
                                                                                                                                                                                                                                                         39%
                                                                                                                                     the Middle East/Asia
                                  • spillover effects of a slowdown of China.                                   The spillover effects of a slowdown in China
                                                                                                                                                                                                                              28%
Acknowledgements                                                                                                                                                                                                                                   37%

                                  In conclusion, the optimistic market sentiment presents                                   Increasing scale and impact of                                                              26%
                                                                                                                                          natural disasters
                                  procurement leaders with an opportunity to achieve greater
Regional and country contacts     value through growth-focused innovation, while continuing to                         Tighter credit conditions and falling                                                            26%
                                  deliver cost reduction and manage risk.                                                         levels of credit availability                                                                       31%

                                                                                                             A bubble in house prices and/or other real and                                                           25%
Further insights                                                                                              financial assets and the risk of higher inflation                                                                               33%

                                                                                                                      Deflation and economic weakness in                                                               25%
                                                                                                                                          the Eurozone                                                                                             37%
Endnotes
                                                                                                                  Increased threat of worldwide terrorism                                                       23%
                                                                                                                                                                             5                                                        31%
                                                                                                                                                                  0                   10        15         20           25            30          35           40
                                                                                                                                                                      2018   2017


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Leadership: Driving innovation and delivering impact
impact| The Deloitte Global Chief Procurement Offi
                                                                                     Leadership: Driving innovation and delivering impact                                         Officer
                                                                                                                                                                                      cer Survey 2018




Introduction                      ...and finally
Executive summary
                                  “CFOs enter 2018 more focused on controlling costs than at any time in the last
Market outlook                     eight years. Despite this, they are more optimistic today than they have been
                                   in the last two years and perceptions of uncertainty are far lower than during
Value and collaboration
                                   the euro crisis and following the EU referendum.”
Talent and leadership
                                  Ian Stewart
                                  Chief Economist, Deloitte LLP
Digital procurement


Action starts here


Industry and regional overviews


About the participants


Acknowledgements


Regional and country contacts


Further insights


Endnotes




                                                                                                                                                                                                  09
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Leadership: Driving innovation and delivering impact | The Deloitte Global Chief Procurement Officer Survey 2018Leadership: Driving innovation and delivering impact| The Deloitte Global Chief Procurement Officer Survey 2018




Introduction


Executive summary                                Value and collaboration
Market outlook


Value and collaboration


Talent and leadership


Digital procurement


Action starts here


Industry and regional overviews


About the participants


Acknowledgements


Regional and country contacts


Further insights


Endnotes




                                                                                                                                                                                                                                                             10
Leadership: Driving innovation and delivering impact
                                                                                                                                                                                       impact | The Deloitte Global Chief Procurement Officer
                                                                                                                                                                                                                                      Officer Survey 2018




Introduction


Executive summary
                                  Procurement leaders are continuing to expand the role of procurement in the wider supply chain. This is being achieved
Market outlook
                                  through better alignment between procurement and business strategies and priorities, adopting a closed loop and holistic
                                  approach to performance measurement for procurement, and proactive involvement in key decision making. However, the
Value and collaboration
                                  same cannot be said about supplier collaboration, which continues to remain an under-utilized lever for delivering value.
                                                                                                 Procurement strategies used to deliver value over the next 12 months
                                   The survey shows:
Talent and leadership                                                                            45%

                                                                                                 40%         39%
                                   • Consolidating spend (37 percent), reducing total life             37%
                                     cycle/ownership costs (32 percent) and increasing                                               35%
                                                                                                 35%
Digital procurement                  competition (31 percent) are the key procurement
                                                                                                                     32%           31%
                                                                                                 30%                                               28%
                                     strategies used to deliver value.                                                    26%                                   26%
                                                                                                 25%                                           24%           23%                      23%
                                                                                                                                                                        22% 22%    21%
Action starts here                                                                               20%                                                                                               19%20%
                                   • Fewer procurement leaders (23 percent) consider                                                                                                                                        18%
                                                                                                                                                                                                              16%
                                     supplier collaboration as a strategy to drive value over    15%                                                                                                             13%    13%
                                                                                                                                                                                                                                   11% 11%         12%
                                     the next 12 months, as compared to 26 percent in 2017.                                                                                                                                                     10%
Industry and regional overviews                                                                  10%

                                                                                                  5%
                                   • Only one in four procurement leaders believe they are
                                     excellent business partners contributing significant          0%
About the participants                                                                              Consolidating                Increasing            Increasing level of      Restructuring               Reducing             Managing
                                     strategic value.                                                  spend                    competition          supplier collaboration    existing supplier        transaction costs     commodity price
                                                                                                                                                                                relationships                                    volatility

Acknowledgements                   • Seventy-three percent of procurement leaders believe
                                     they have the support of their organization’s leadership;                    Reducing                    Specification             Business              Restructuring              Reducing             Outsourcing of
                                     however the number of respondents who feel “very                           total lifecycle/             improvement              partnering            the supply base             demand                  non-core
                                                                                                               ownership costs                                                                                                                sourcing and
Regional and country contacts        supportive” has fallen from 43 percent to 31 percent.
                                                                                                                                                                                                                                              procurement
                                                                                                                                                                                                                                                activities
                                                                                                       2018        2017
                                   • Overall supply chain transparency is poor, with
Further insights                     65 percent of procurement leaders having limited
                                     or no visibility beyond their tier 1 suppliers.

Endnotes




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Leadership: Driving innovation and delivering impact | The Deloitte Global Chief Procurement Officer Survey 2018Leadership: Driving innovation and delivering impact| The Deloitte Global Chief Procurement Officer Survey 2018




Introduction


Executive summary
                                  Procurement value drivers                                                  Current effectiveness of the procurement function as a business partner, in comparison to where procurement aspires to be
                                  To deliver the procurement strategy priorities of cost reduction,

Market outlook
                                  new products/market development, and managing risk,
                                                                                                                                                         70%                                                                      86%
                                  procurement leaders have continued to show a preference
                                  for deploying traditional levers such as consolidating spend
                                                                                                                   Current                                                             Future
                                  and increasing competition to deliver value. Reducing total life
Value and collaboration
                                  cycle/ownership costs has become a more prominent strategy,                                                                      24%                                                                    12%
                                  indicating a broadening in the agenda for procurement within
Talent and leadership             organizations. This can be enabled through specification
                                                                                                                              6%                                                               2%
                                  improvement and demand management, although the use
                                  of both these strategies fell this year.
                                                                                                                   Excellent – procurement is highly regarded internally and seen as a key business partner which contributes significant strategic value
Digital procurement
                                                                                                                   Fair – procurement has mixed influence internally with stronger relationships with some functions than others
                                  Surprisingly, compared to last year, there
                                                                                                                   Poor – procurement operates in silos from the rest of the business and struggles to collaborate with other functions
Action starts here                has been less use of closer collaboration
                                  with suppliers to deliver value, indicating
                                                                                                             Measures forming part of organization’s balanced scorecard for procurement
Industry and regional overviews   a continued focus on more tactical
                                  levers to support the achievement of                                                       OPEX savings                                                                                                                   74%


About the participants            procurement strategies.                                                                   CAPEX savings                                                                                                         63%

                                                                                                                           Cost avoidance                                                                                                     61%
                                  Collaboration with business
Acknowledgements                  Last year, 86 percent of procurement leaders aspired to being                     Supplier performance                                                                                                    59%
                                  “excellent” as a strategic business partner in the future. In 2018,
                                                                                                                      Operating efficiency                                                                                              56%
                                  only 24 percent consider themselves as excellent: although this is
Regional and country contacts     a slight improvement from 2017, it highlights the need for further         Internal customer satisfaction                                                                                 50%
                                  improvement in business partnering by procurement teams.
                                                                                                                      Supplier compliance                                                                          45%
Further insights                  Many of the metrics which form the balanced scorecard for                                     Innovation                                                                 40%
                                  procurement have increased in their use, and much greater
                                  importance is placed on operating efficiency, supplier                                Supplier satisfaction                 12%
Endnotes                          compliance and innovation compared to last year.                              No procurement balanced
                                                                                                                                                            12%
                                                                                                                       scorecard in place

                                                                                                                                              0             10               20               30              40               50                 60       70
                                  12                                                                                                                                                                                                                              12
impact| The Deloitte Global Chief Procurement Offi
                                                                                                                                              Leadership: Driving innovation and delivering impact                                         Officer
                                                                                                                                                                                                                                               cer Survey 2018




Introduction


Executive summary
                                  Executive advocacy                                                    Extent to which procurement plays an active role in strategic decision making
                                  Executive support and sponsorship is a critical success factor in
                                  delivering on a procurement leader’s vision and strategy.
Market outlook

                                  Seventy-three percent of procurement
Value and collaboration                                                                                                                                                                                                             Shaping/changing
                                  leaders believe that they have the                                        New product
                                                                                                            development                       Make vs Buy                            M&A               Corp risk planning            the way services
                                                                                                                                                                                        27% 27%                                         are delivered
                                  support of their executives.                                                                            61%
Talent and leadership                                                                                           49%
                                                                                                                                        62%                                                                       44%                     53%
                                                                                                                                                                                                                                         54%
                                  However, the level of support has dropped with only 31 percent                       43%                                                                                      49%
                                  feeling “highly supported” as compared to 43 percent last year.
Digital procurement               This presents a challenge for procurement leadership to develop
                                                                                                                2018         2017
                                  strategies closer to the business priorities and deliver results to
                                  maintain high levels of executive support.
Action starts here                                                                                      Approaches employed to understand stakeholder requirements
                                  Procurement’s involvement in new product development
                                  decision making has increased, while involvement in corporate                  Procurement team members embedded in                                                                                                76%
Industry and regional overviews                                                                                                    cross-functional teams                                                                                             77%
                                  risk planning has fallen. Involvement in M&A remains low,
                                  possibly due to lower M&A activity in general.                                    Procurement targets jointly owned with                                                              53%
                                                                                                                                     internal stakeholders                                                                        62%
About the participants
                                  High-performing procurement organizations have both greater                  Procurement measures performance against a                                                      47%
                                  levels of involvement in decision making and in deployment            balanced scorecard aligned to functional requirements                                               44%
                                  of balanced scorecards, demonstrating the need to maintain                      Procurement physically co-located within
Acknowledgements                                                                                                                        business functions
                                                                                                                                                                                                             45%
                                  focus in these areas. Despite better collaboration between                                                                                                                  46%
                                  procurement and the rest of the business, we have seen a                    Customer satisfaction surveys (to understand                                          37%
Regional and country contacts     downward trend in both procurement targets being jointly                                business needs of procurement)                                                        45%
                                  owned with internal stakeholders and also in the use
                                                                                                                                                                        11%
                                  of customer satisfaction surveys to better understand                                                               Other
                                                                                                                                                                       10%
Further insights                  business needs.                                                                                                               0
                                                                                                                                                                           10       20         30          40           50         60           70          80
                                                                                                                                                                    2018     2017


Endnotes




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Leadership: Driving innovation and delivering impact | The Deloitte Global Chief Procurement Officer Survey 2018Leadership: Driving innovation and delivering impact| The Deloitte Global Chief Procurement Officer Survey 2018




Introduction


Executive summary
                                  Savings performance improvement year over year has been                     Comparing savings performance to business partnering across industries
                                  linked to improvements in business partnering in most sectors,
                                  in particular in consumer business. Conversely, in energy and                                              40%
Market outlook
                                  resources and manufacturing, where business partnering
                                  dropped, so did savings performance.
                                                                                                                                             35%
Value and collaboration
                                  Collaboration with suppliers
                                  Supplier collaboration is key to innovation, but over the last few
                                                                                                                                             30%
Talent and leadership             years, fewer procurement leaders seem to have used supplier
                                  collaboration as a procurement strategy for delivering greater




                                                                                                             Excellent business partnering
                                  value. Only 23 percent of procurement leaders in 2018 plan to
                                                                                                                                             25%
Digital procurement               increase the level of supplier collaboration as a lever to deliver
                                  value, a decrease from 26 percent last year and 39 percent
                                  in 2016.
                                                                                                                                             20%
Action starts here
                                  Despite this, procurement leaders globally have indicated
                                  a desire to focus on collaboration and building partnerships                                               15%
Industry and regional overviews   with key suppliers to achieve improved innovation within their
                                  organizations, with two-thirds of respondents identifying
                                  “generate win-win situations and trust” as a key approach                                                  10%
About the participants            for doing so.

                                                                                                                                             5%
Acknowledgements

                                                                                                                                             0%
Regional and country contacts                                                                                                                  40%               45%                  50%           55%              60%                65%                70%              75%               80%

                                                                                                                                                                                                   Better savings performance than last year


Further insights
                                                                                                                                                     Business & professional services       Government & public sector                         Consumer business              Manufacturing

                                                                                                                                                     Financial services & insurance         Technology, media, and telecommunications          Healthcare & life sciences     Energy & resource
Endnotes
                                                                                                                                                     Industry position in 2017                  Indication of industry movement from 2017 to 2018




                                  14                                                                                                                                                                                                                                                           14
Leadership: Driving innovation and delivering impact
                                                                                                                                                                                                  impact | The Deloitte Global Chief Procurement Officer
                                                                                                                                                                                                                                                 Officer Survey 2018




Introduction


Executive summary
                                  A surprising and somewhat worrying                                        Main approaches adopted to improve innovation levels and partnering with key / strategic suppliers

                                  finding from this year’s survey is that                                         Generate win-win situation and trust
Market outlook                                                                                                                                                                                                                                            65%
                                  65 percent of procurement leaders say
                                                                                                            Define your strategic/innovation partners                                                                                                 64%

Value and collaboration
                                  they have limited or no visibility beyond
                                                                                                            Specify collabororation relationships level
                                  their tier 1 suppliers.                                                           with strategic/innovation partners
                                                                                                                                                                                                                                              60%

                                                                                                             Execute regular “innovation awards” for
                                                                                                                                                                              14%
Talent and leadership             This has major implications for organizations across all                           select key suppliers/innovations
                                  industries, particularly for meeting regulatory and corporate                                                   Other          5%
                                  social responsibility requirements and for the identification and
Digital procurement               mitigation of supply chain risks. In addition, greater visibility lends                                                   0%             10%           20%             30%              40%          50%          60%         70%
                                  itself to greater innovation and improved total cost of ownership.
                                  High performers are two-and-a-half times more likely than their           Current level of supply chain transparency
Action starts here                peers to have full supply chain transparency.

                                  We anticipate that the challenges for organizations will be                                                                    Not applicable   1%   Full transparency of entire supply chain
Industry and regional overviews   increased in future by the rise of Digital Supply Networks,
                                  changing industry dynamics, and the race for talent.
                                                                                                                         Virtually no visibility below tier 1         11%           6%
                                  Procurement functions will be required to improve their
About the participants            capabilities, not just to achieve cost reduction, but also to
                                  manage risk and support product and market innovation.
                                                                                                                                                                                               27%           Good transparency below tier 1
Acknowledgements


Regional and country contacts

                                                                                                                          Limited visibility below tier 1         54%
Further insights


Endnotes




                                                                                                                                                                                                                                                                 15
Leadership: Driving innovation and delivering impact | The Deloitte Global Chief Procurement Officer Survey 2018Leadership: Driving innovation and delivering impact| The Deloitte Global Chief Procurement Officer Survey 2018




Introduction


Executive summary
                                  In Deloitte’s view, joint strategic planning (JSP)3 is crucial for         Joint strategic planning approach
                                  unlocking value and innovation in businesses and suppliers.
                                                                                                             Build foundation for joint strategic planning                                                           Define action and intended business impacts
Market outlook
                                  JSP builds on the foundation of existing supplier collaboration
                                                                                                                    Define collaborative                            Segment                     Define collaboration                       Develop
                                  programs to enable procurement to provide strategic, innovative,
                                                                                                                          vision                                   vendors                          process                             capabilities
Value and collaboration           and end-to-end capabilities for the organization. It is based on
                                  the concepts of increased transparency, reduced friction, deeper,
                                  increased leadership engagement, and adoption of new risk-
Talent and leadership             reward arrangements.
                                                                                                                                          Assessment                                                                 Structure

                                  Joint strategic planning helps enable
Digital procurement
                                  procurement leaders to shift the
Action starts here
                                  conversation from tactical to strategic,                                                                Sustainment                                                              Deployment
                                  from transactional to collaborative, and
Industry and regional overviews
                                  from reactive to proactive.
                                                                                                                           Track                             Establish governance             Refine collaboration                        Roll out
                                  In an era where businesses are looking at long-term strategies,                      performance                                   model                        processes                              program
                                  relationship-powered approaches such as JSP, that have a
About the participants
                                  track record of contributing to sales growth, increased profits,            Set up governance processes to manage                                                                                     Execute joint strategy plan
                                  investment generation, and innovation, need to be given greater
Acknowledgements                  prominence and form part of the levers used by procurement
                                  leaders to unlock value.


Regional and country contacts


Further insights


Endnotes




                                  16                                                                                                                                                                                                                           16
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Introduction                      ...and finally
Executive summary
                                  “The most satisfying part of my role is aligning well and listening to my customer and
Market outlook                     internal stakeholders around objectives and expectations, because it is not always
                                   a good idea to lead a conversation with “look how much money I can save you.”
Value and collaboration
                                   Working with business stakeholders to define a usable taxonomy and segment
Talent and leadership              suppliers help build a framework for supplier relationship management to help
                                   determine the size of the procurement team and prioritization of our efforts.”
Digital procurement
                                   David Bondi
                                   SVP-Chief Procurement Officer, Revlon
Action starts here


Industry and regional overviews   “Trends shaping the business environment continue to evolve and elevate the
                                   procurement function to new levels. The competitive advantage that we can provide
About the participants
                                   has never been more evident. But with this opportunity, we are also challenged to
Acknowledgements
                                   elevate our game. We must cement success in areas such as talent management,
                                   category management and customer relationships; and then allow ourselves to
Regional and country contacts      evolve to newer strategies such as digitization and advanced supplier management.
                                   I believe that the next three to five years will shape this new agenda for the
Further insights
                                   procurement profession.”
Endnotes
                                    Bill Dempsey
                                    Chief Procurement Officer, MolsonCoors




                                                                                                                                                                                                                                                             17
Leadership: Driving innovation and delivering impact | The Deloitte Global Chief Procurement Officer Survey 2018Leadership: Driving innovation and delivering impact| The Deloitte Global Chief Procurement Officer Survey 2018




Introduction


Executive summary                                    Talent and leadership
Market outlook


Value and collaboration


Talent and leadership


Digital procurement


Action starts here


Industry and regional overviews


About the participants


Acknowledgements


Regional and country contacts


Further insights


Endnotes




                                                                                                                                                                                                                                                             18
Leadership: Driving innovation and delivering impact
                                                                                                                                                                                       impact| The Deloitte Global Chief Procurement Officer
                                                                                                                                                                                                                                      Officer Survey 2018




Introduction


Executive summary
                                  A clear imperative for procurement leaders at high performing organizations is to lead the procurement, business, supplier
                                  and digital agenda. However, 51 percent of procurement leaders do not believe that they have the capability in their teams
Market outlook
                                  to deliver their procurement strategy. They see a need to shift the traditional talent models and practices in procurement
                                  and at suppliers, and fill leadership capability gaps that exist in innovation, positive disruption, and digital transformation.
Value and collaboration

                                                                                                  Procurement leadership
                                   The survey shows:
Talent and leadership                                                                             Across all organizations, the capabilities of procurement leadership are strongest in the three areas of collaboration, acting as a
                                                                                                  role mode, and delivering results. This has a positive impact on development of stronger business and supplier partnerships, and
                                   • Most common leadership traits in procurement are             the associated results. Savings delivery performance continues to improve, as does the view among procurement leaders that
Digital procurement                  collaborating, acting as a role model and delivering         procurement is an effective business partner, and that they are achieving success with their day-to-day priorities.
                                     results, and weakest traits are innovation, positive
                                     disruption and digital transformation.
                                                                                                  Key leadership traits of procurement leaders
Action starts here
                                   • Fifty-two percent of procurement leaders are confident                                                                                                                                                                           2%
                                                                                                   Collaborating internally and externally to deliver value               20%                                51%                              21%          6%
                                     that their key suppliers are equipped to support
                                                                                                                                                                                                                                                                 3%
Industry and regional overviews      their organization’s growth plans. High performing              Acting as a role model for your organizational values                 23%                             43%                                25%          6%
                                     organizations are twice as likely to believe their                                                                                                                                                                          3%
                                     organizations are fully equipped to succeed.                 Delivering results including stopping ineffective activities        14%                             48%                                    29%            6%
About the participants                                                                                                                                                                                                                                           2%
                                   • Fifty-one percent of procurement leaders believe                Shaping and influencing future successful strategies            11%                        46%                                    30%                 11%
                                                                                                                                                                                                                                                                 2%
                                     that their current teams do not have sufficient levels         Creating alignment across the organization to enable the
                                                                                                                                                                    11%                        45%                                    32%                 10%
Acknowledgements                     of skills and capabilities to deliver on their procurement   best allocation of resources and return on investments
                                                                                                                                                                                                                                                                 3%
                                     strategy.                                                                     Pioneering change and inspiring others           12%                        41%                                 34%                    10%
                                                                                                                                                                                                                                                                 3%
                                                                                                  Identifying talent and optimize their current performance
Regional and country contacts      • Seventy-two percent of procurement leaders are                                 while developing their future capability
                                                                                                                                                                    9%                       42%                                33%                     13%
                                     spending less than 2 percent of their budgets on                    Investing in innovation that delivers competitive
                                                                                                                                                                   8%                  33%                               37%                        18%          4%
                                     training, an increase from 66 percent in 2017.                                                             advantage
Further insights                                                                                    Disrupting the execution of business plans or projects
                                                                                                                                                                  5%             28%                               40%                            20%           7%
                                                                                                  to drive more value from resources and/or investments
                                   • Nearly three-quarters of procurement leaders have
                                     said that their procurement teams possess little or                     Leading digital and analytical transformation        6%             21%                       39%                                26%               8%
Endnotes                             no capability to maximise the use of current and future                                                                             10%
                                                                                                                                                                0%       10%       20%      30%   40%      50%           60%      70%       80%     90%        100%
                                     digital technologies, but only 16 percent of procurement                                                                   Fully enabling      Enabling    Somewhat enabling         Not very enabling     Not at all enabling
                                     leaders are focusing on enhancing the digital skills
                                     of their teams.


                                                                                                                                                                                                                                                                      19
Leadership: Driving innovation and delivering impact | The Deloitte Global Chief Procurement Officer Survey 2018Leadership: Driving innovation and delivering impact| The Deloitte Global Chief Procurement Officer Survey 2018




Introduction


Executive summary
                                  However leadership is weak with regard                                     Extent to which procurement leaders are enabling their organizations or suppliers

                                  to investing in innovation, leading digital                                                Fully enabling                                               22%
Market outlook                                                                                                                                                         12%
                                  transformation, and positive disruption.
                                                                                                                                   Enabling                                                                                               44%

Value and collaboration
                                  This will have implications for future                                                                                                                                                         40%

                                  performance unless addressed with                                                    Somewhat enabling                                                          25%
                                                                                                                                                                                                               32%

Talent and leadership
                                  new leaders or through accelerated                                                     Not very enabling
                                                                                                                                                             7%

                                  capability development, and there is a                                                                                                    13%

                                                                                                                                                2%
Digital procurement               risk of the procurement function being                                                 Not at all enabling
                                                                                                                                                       4%

                                  “left behind.”                                                                                               0%                     10%                20%                  30%                   40%                   50%
                                                                                                                                                    High performers    Average
Action starts here                Leaders in high-performing organizations score considerably
                                  better across the leadership traits than their peers in other
                                  organizations. This emphasizes the importance of having strong             Perceived level of ability within current teams to deliver procurement strategies
Industry and regional overviews   functional leaders in procurement to drive higher performance,
                                  both internally and with suppliers.                                                                                                              48%     2013         52%

About the participants            Talent development
                                                                                                                                                                                   57%     2014         43%
                                  Only 49 percent of procurement leaders believe that their
                                  current teams have sufficient levels of skills and capabilities
Acknowledgements
                                  to deliver their procurement strategy. Remarkably, this is the                                                                                   62%     2015         38%
                                  highest level of confidence shown by procurement leaders in
                                  their teams since 2013, but it is still very low.
Regional and country contacts                                                                                                                                                      60%     2017         40%



                                                                                                                                                                                   51%     2018         49%
Further insights
                                                                                                                              Not able         Able

Endnotes




                                  20                                                                                                                                                                                                                         20
Leadership: Driving innovation and delivering impact
                                                                                                                                                                                         impact| The Deloitte Global Chief Procurement Officer
                                                                                                                                                                                                                                        Officer Survey 2018




Introduction


Executive summary
                                  Spending on talent development                                        Percentage spend on training procurement

                                  has also fallen, with 72 percent of
Market outlook                                                                                          2011         8%                    30%                                                             58%                                    4%
                                  procurement leaders spending less than
Value and collaboration
                                  two percent of their operating budgets                                2012          9%              20%                                                            68%                                          3%


                                  on training and development programs                                  2015          11%                   23%                                          37%                                       29%


Talent and leadership
                                  for their teams, compared to 66 percent                                            8%                26%                                                   41%                                      25%
                                                                                                        2017
                                  last year.
                                                                                                        2018         8%             20%                                       38%                                               34%
Digital procurement               Survey results for recruiting and training talent also paint a less
                                                                                                               0%                      20%                            40%                          60%                   80%                       100%
                                  optimistic picture. While sources of talent recruitment remained
                                  broadly unchanged since last year, 47 percent of procurement                       More than 4%   2-4%         1-2%        Less than 1%
Action starts here                leaders found it more difficult to attract talent in the last
                                  12 months.                                                            Percentage of budget spent on training procurement talent – high performers vs average

Industry and regional overviews   Again, analysis shows that organizations performing at a higher
                                                                                                                                              40%
                                  level tend to spend more on training for their procurement                                                             38%
                                  teams than their peers in other organizations, with almost                                                                                             34%
About the participants            twice as many spending more than 4 percent of their
                                  overall budgets.                                                              26%

                                                                                                                              20%                                           21%
Acknowledgements                                                                                                                                                                                           14%



Regional and country contacts


                                                                                                                                                                                                           $
                                                                                                                                                                                                                         8%



Further insights
                                                                                                                                                                                                                         $
                                                                                                                    Less than 1%                  1% to 2%                        2% to 4%                  More than 4%
Endnotes
                                                                                                                High performers     Average




                                                                                                                                                                                                                                                       21
Leadership: Driving innovation and delivering impact | The Deloitte Global Chief Procurement Officer Survey 2018Leadership: Driving innovation and delivering impact| The Deloitte Global Chief Procurement Officer Survey 2018




Introduction


Executive summary
                                  Only 16 percent of procurement leaders are focusing on                     Area of training focus planned for 2018
                                  developing digital skills within their teams, despite the fact that
                                  72 percent indicated that procurement staff possess only some
Market outlook
                                  or no capability to maximize use of digital technologies.


Value and collaboration           Another disappointing finding is the lack                                                                                                          36%                             16%
                                  of a clear talent development strategy,                                                           41%
Talent and leadership             with a significant reduction year
                                  over year in the use of procurement                                                                                                                                                                                7%
Digital procurement               academies and/or a procurement
                                  training curriculum, and lower levels of                                      Technical procurement skills (e.g. negotiation
                                                                                                                    training, strategic sourcing training)
                                                                                                                                                                   Soft skills (e.g. conflict management,
                                                                                                                                                                     emotional intelligence, business
                                                                                                                                                                                                             Digital skills (e.g. big data
                                                                                                                                                                                                                     synthesis,
                                                                                                                                                                                                                                               No formal training
                                                                                                                                                                                                                                                   is planned
Action starts here                engagement in placements within the                                                                                             partnering/relationship management,          predictive analytics)
                                                                                                                                                                          collaboration skills, etc.)
                                  rest of the business.
Industry and regional overviews                                                                              Talent development strategies
                                  Levels of procurement outsourcing have dropped to 10 percent,
                                  which is the lowest level we have seen over the last five years.
About the participants
                                  Overall, these findings raise the question of whether global
                                                                                                             2018
                                  procurement leaders are investing adequately in their people
Acknowledgements                  and in the right development areas. The survey responses
                                                                                                                               53%                              45%                        32%                   26%                      14%          10%
                                  indicate that is not the case and that a positive shift may
                                  be required.
                                                                                                                        We encourage the                We have developed a       We engage in placements   We have accelerated      We have developed     Other
Regional and country contacts                                                                                    procurement team to take part in   procurement academy and/or       within the rest of          pathways             a school leavers
                                                                                                                    non-procurement training,              a procurement               the business                                       program
                                                                                                                     for example with finance             training curriculum

Further insights
                                                                                                                               59%                                                         43%                   28%                      12%          0%
                                                                                                                                                                 54%

Endnotes                                                                                                     2017




                                  22                                                                                                                                                                                                                               22
Leadership: Driving innovation and delivering impact
                                                                                                                                                                                       impact | The Deloitte Global Chief Procurement Officer
                                                                                                                                                                                                                                      Officer Survey 2018




Introduction


Executive summary
                                  Supplier leadership                                                  Extent to which leaders at key suppliers are equipped to help the organization succeed
                                  Only 52 percent of our respondents believe that leaders at their
                                  key/strategic suppliers are equipped to help the procurement                                                     12%
                                                                                                           Fully equipped
Market outlook                                                                                                                          6%
                                  leaders organization succeed.
                                                                                                                                                                                                                                            49%
                                                                                                                Equipped
                                                                                                                                                                                                                                      46%
Value and collaboration           High-performing organization are twice                                                                                                                                              38%
                                                                                                       Somewhat equipped
                                  as likely to believe their suppliers are                                                                                                                                                      44%

Talent and leadership             fully equipped to succeed.                                            Not very equipped     0%
                                                                                                                                   4%

                                  This positive correlation reinforces the necessity for procurement                        0% High performers
                                                                                                                                           10%    Average   20%              30%              40%               50%             60%
Digital procurement               to focus on the development of leadership at suppliers as a
                                  priority to achieve improved performance.

Action starts here                Without strong leadership at suppliers, it is clear that target
                                  supplier performance levels become more difficult to achieve.

Industry and regional overviews
                                  A Deloitte study on digitally maturing organizations shows that
                                  to become “talent magnets,” and develop and retain talent,
                                  leaders of digitally maturing organizations are focusing on
About the participants
                                  the creation of an environment in which employees are eager
                                  to learn and develop continuously by gaining and embracing
                                  digital experiences. An increasing number of organizations
Acknowledgements
                                  are encouraging employees to participate in platforms and
                                  communities where they can share ideas and learn new skills
Regional and country contacts     from experts in other organizations. From a procurement
                                  perspective, these platforms and communities include key
                                  strategic suppliers to help drive innovation and joint strategic
Further insights                  partnerships.



Endnotes




                                                                                                                                                                                                                                                    23
Leadership: Driving innovation and delivering impact| The Deloitte Global Chief Procurement Officer Survey 2018



                                  Leadership: Driving innovation and delivering impact | The Deloitte Global Chief Procurement Officer Survey 2018


Introduction


Executive summary                 Lucy Harding: Odgers Berndston point of view
Market outlook                    The war for talent is ongoing. The survey results show that demand for forward-thinking, innovative, and
                                  business-minded procurement experts at all levels continues to outstrip supply, and this situation will not
Value and collaboration           change in the foreseeable future.
                                  Clearly, the market for talent is extremely competitive and only those organizations with a compelling, strategic and business-centric procurement story to tell
Talent and leadership
                                  will attract and retain the best procurement minds. Likewise, people work for people; and strong leadership and a commitment to developing talent and growing
                                  individual careers creates loyalty and is key to attracting talent. It is encouraging that the 2018 survey shows that procurement leaders’ confidence in their teams
                                  to deliver their objectives continues to improve. The low levels of investment in training and declining participation in talent development strategies remain
Digital procurement
                                  a concern, suggesting that this optimism may not be sustainable in the future.

                                  From a digital perspective, the emerging technologies are exciting and if deployed successfully can bring huge advantages to procurement. However, technology
Action starts here
                                  is an enabler, and is not the panacea for all the challenges faced by the function: leaders still need to invest heavily in people. They need to understand not only
                                  the technology but also how to deploy it, draw conclusions from the data, and implement new strategies for the tangible benefit of the organization. It remains
Industry and regional overviews   a critical requirement to develop leadership skills and strategic thinking, and also an ability to engage with broader business leaders and teams, and inspire
                                  suppliers to work with you. We must not lose sight of this as the “rise of the robots” progresses.
                                                                                                                                                                                                                             Lucy Harding
About the participants            It is increasingly important, to attract talent, for organizations to be seen to move in the digital space. If a business is investing in the latest technologies,                         Partner and Global Head of
                                  this indicates that it is up to date with the latest thinking. This attracts people who consider that their career will benefit if they are exposed to innovations                          Practice, Procurement and
                                  in technology. Top talent, especially those in the millennial generation, will not choose to work in an organization that is significantly behind the latest trends                         Supply Chain,
Acknowledgements                  and technologies.                                                                                                                                                                          Odgers Berndston

                                  In summary, talent remains a concern for many organizations and should be a critical focus for procurement leadership as the demands of businesses continue
Regional and country contacts     to grow and the bar is continuously raised.



Further insights
                                  Focus on investing in your teams and in technology, and spend time to build trust with your suppliers
                                  to harness their talent, too – since we don’t have enough to go round.
Endnotes




                                                                                                                                                                                                                                                            24
Leadership: Driving innovation and delivering impact
                                                                                                                                                                           impact | The Deloitte Global Chief Procurement Officer
                                                                                                                                                                                                                          Officer Survey 2018




Introduction                      ...and finally
Executive summary
                                  “In any transformation or leadership of procurement led change I have learned
Market outlook                     that I always need to understand the 3 Ps; people, processes, and how to develop
                                   a program of change. The latter two always appear the most difficult to achieve
Value and collaboration
                                   yet it is the people that will make the difference. Select well, technical skills can be
Talent and leadership              learned but above all build a resilient team with diverse personalities and have fun
                                   along the way.”
Digital procurement
                                  Patrick Dunne
                                  Director of Group Procurement & Cost Base Transformation, Sainsbury’s
                                                                                        Pages   from print document to be inserted, and centred here at 100% scale...
Action starts here
                                                                                                                       (297x210mm)


Industry and regional overviews


About the participants


Acknowledgements


Regional and country contacts


Further insights


Endnotes




                                                                                                                                                                                                                                        25
Leadership: Driving innovation and delivering impact| The Deloitte Global Chief Procurement Officer Survey 2018
                                  Leadership: Driving innovation and delivering impact | The Deloitte Global Chief Procurement Officer Survey 2018




Introduction


Executive summary                                   Digital procurement
Market outlook


Value and collaboration


Talent and leadership


Digital procurement


Action starts here


Industry and regional overviews


About the participants


Acknowledgements


Regional and country contacts


Further insights


Endnotes




                                                                                                                                                                                                                                                           26
Leadership: Driving innovation and delivering impact
                                                                                                                                                                                             impact | The Deloitte Global Chief Procurement Officer
                                                                                                                                                                                                                                            Officer Survey 2018




Introduction


Executive summary
                                  Despite recognizing digital technologies, their impact and imminent uses, few organizations appear to be progressing at the
                                  rate that their C-suite executives consider necessary for achieving overall goals. Indeed, in the majority of areas, the level of
Market outlook
                                  impact has declined and the forecast application of new technologies is low.
Value and collaboration                                                                             Digitalization
                                   The survey shows:                                                The level and speed of digitalization across procurement functions is lower than expected and needed. Only 4 percent of
                                                                                                    procurement leaders believe that procurement has a big influence in delivering their organization’s overall digital strategy and only 6
Talent and leadership              • Seventeen percent of procurement leaders do not have           percent of the procurement leaders in the survey believe that their digital procurement strategy will help them to fully deliver on their
                                     a digital procurement strategy, and of those that do,          objectives and improve enterprise value. Only 18 percent of procurement leaders have a digital procurement strategy supported by a
                                     less than one-third believe that their strategy will enable    complete business case.
Digital procurement                  procurement to deliver significantly on its objectives and
                                     improve enterprise value.
                                                                                                    Enterprise digital impact                                     Digital procurement strategy impact                       Business case completed

Action starts here                 • The rate of digital technology adoption among
                                                                                                                                 1%

                                     organizations is highest in the transactional purchase                                4%         5%                                               6%
                                                                                                                                                                                                 13%
                                                                                                                                                                                                                                                      4%
                                                                                                                                                                                                                                                           4%
                                     to pay (P2P) process, followed by sourcing and tactical                                                                                                                                                18%
                                                                                                                                                                                                                                                                10%
Industry and regional overviews      buying.                                                                                                                                                               4%
                                                                                                                                                    20%
                                                                                                           26%                                                         27%
                                   • Analytics will have the most impact on procurement in the
About the participants               next two years.
                                                                                                                                                                                                               19%

                                                                                                                                                                                                                                                                      25%
                                   • Analytics are being used for cost optimization (50 percent),
Acknowledgements                     process improvement (48 percent) and management                                                                                                                                                  39%
                                     reporting (45 percent).

Regional and country contacts      • Only 3 percent of procurement leaders believe their staff
                                                                                                                                 44%                                                    31%

                                     possess all the skills required to maximize use of digital
                                     capabilities.                                                           Completely         To a large extent         To some extent     To a small extent    Not at all         Not applicable
Further insights


Endnotes




                                                                                                                                                                                                                                                                            27
Leadership: Driving innovation and delivering impact | The Deloitte Global Chief Procurement Officer Survey 2018Leadership: Driving innovation and delivering impact| The Deloitte Global Chief Procurement Officer Survey 2018




Introduction


Executive summary
                                  The impact of a digital procurement                                        Extent to which key objectives are incorporated in digital strategy

                                  strategy can be measured by the                                               Efficiency                                                                                             13%
Market outlook                                                                                                                     11%                                     39%

                                  extent to which the key objectives of
Value and collaboration
                                  efficiency, effectiveness, engagement,                                        Effectiveness          9%                                35%                                      16%

                                  and experience are incorporated in the
Talent and leadership
                                  digital procurement strategy, and the                                      Engagement           8%                          27%                                    21%

                                  level of success in implementing them.
Digital procurement               Impact of digital strategy                                                   Experience         7%                          30%                                    19%

                                  Responses to our survey suggest that overall the level of
                                  incorporation of these objectives in the digital strategy is low and
Action starts here                achievement is unsatisfactory. This may suggest that in order to                               Completely     To a large extent    To some extent
                                  see the real impact of digital transformation and benefit from
                                  it, procurement leaders need to review and refine their digital             Level of success in implementing key objectives
Industry and regional overviews   vision and strategy, to make it more action-oriented, agile, and
                                  saleable. In addition, procurement leaders should increase the                Efficiency      5%                           30%                                             29%
                                  focus on engagement and experience.
About the participants

                                                                                                             Effectiveness    3%                  25%                                                34%

Acknowledgements

                                                                                                             Engagement     2%                 21%                                           37%
Regional and country contacts

                                                                                                               Experience    4%                  20%                                  22%
Further insights

                                                                                                                                 Completely      To large extent     To some extent
Endnotes




                                  28                                                                                                                                                                                                                         28
Leadership: Driving innovation and delivering impact
                                                                                                                                                                                      impact | The Deloitte Global Chief Procurement Officer
                                                                                                                                                                                                                                     Officer Survey 2018




Introduction


Executive summary
                                  Digital technology adoption                                       Impact of digital technologies
                                  With rapid advancements in digital technologies, many
                                                                                                           Source to contract                                Purchase to pay                                     Supplier management
                                  organizations are shifting their focus towards understanding
Market outlook                                                                                             becomes predictive                                becomes automated                                   becomes proactive
                                  current and future digital innovations and their application in
                                  their own businesses.                                                   Imagine...                                        Imagine...                                          Imagine...
                                                                                                          . Managing spend in real time                     . Automatically sensing material                    . Monitoring risk in real time
Value and collaboration                                                                                   . Predicting demand with                            demand and requisitioning delivery                . Conducting supplier visits utilizing
                                  Deloitte’s view is that applying digital                                  artificial intelligence                          . Eliminating repetitive processing                   augumented reality

                                  technologies to the procurement                                         . Knowing total cost for commodities              . Triggering payments in real time                  . Performing supplier audits through
Talent and leadership                                                                                     . Predicting sources of future supply             . Exchanging goods through                            crowd sourcing
                                  function will enable strategic sourcing to                                                                                     decentralized ledgers                          . Monitoring sustainability using
                                                                                                                                                                                                                  automated reporting/vizualization
Digital procurement               become more predictive, transactional
                                  procurement to become more                                               Procurement operations become intelligent

                                  automated, supplier management
                                                                                                          Social media platforms are leveraged               Procurement platforms, ecosystems and              Supplier and workforce requirements are
Action starts here                                                                                        to connect employees and suppliers                 networks are created                               analyzed to ensure workforce is optimally utilized

                                  to become more proactive, and
                                                                                                    The degree to which digital technologies are being used to enable processes
Industry and regional overviews   procurement operations to become
                                                                                                    Business partnering and strategy development     11%                 23%                              38%                               22%            6%
                                  more intelligent.
About the participants                                                                                                    Category management        11%                 23%                              38%                               23%             5%
                                  Procurement leaders globally have embarked on the digital
                                  transformation journey, with nearly one-quarter starting with
                                                                                                                 Sourcing and operational buying   6%             19%                          32%                              32%                     11%
                                  the payment and requisitioning/ordering processes. Supplier
Acknowledgements
                                  risk management and supplier management are the least
                                  digitized processes.                                                                               Contracting     11%                 21%                              37%                             23%             8%

Regional and country contacts
                                                                                                                            Requisition/ordering   6%        14%                   24%                           34%                              22%


Further insights                                                                                                    Payment (including financing)   6%       11%                  26%                             34%                              23%


                                                                                                    Supplier management (including performance,
                                                                                                                                                     13%                       30%                                37%                           16%         4%
                                                                                                                    relationship and innovation)
Endnotes
                                                                                                                       Supplier risk management            19%                           32%                      32%                           13%           4%


                                                                                                                                                    Not at all          To a small extent      To some extent    To a large extent      Completely


                                                                                                                                                                                                                                                                29
Leadership: Driving innovation and delivering impact | The Deloitte Global Chief Procurement Officer Survey 2018Leadership: Driving innovation and delivering impact| The Deloitte Global Chief Procurement Officer Survey 2018




Introduction


Executive summary
                                  Sixty-six percent of procurement leaders predict that supplier             Aspects of the procurement process expected to be most significantly impacted by technology in the next 5 years
                                  management (including performance, risk, relationship, and                 Business planning; strategy development (including spend
                                                                                                                                                                                            -18%                                                   24%
                                  innovation), sourcing and operational buying, and business
Market outlook                                                                                                                                   analytics and research)
                                  planning and strategy development (including spend analytics
                                                                                                                                       Sourcing and operational buying                                         -5%                            22%
                                  and research) will undergo the biggest changes due to digital
                                                                                                                    Supplier management (including performance, risk,
Value and collaboration           technology over the next five years. Having said that, 18 percent                                                                                                       -9%                                 20%
                                                                                                                                        relationship and innovation)
                                  of procurement leaders also indicated that business planning
                                                                                                                                                   Requisition/ordering                           -14%                                 16%
                                  and strategy development (including spend analytics and
Talent and leadership             research) is the least likely to change.                                                                       Category management                         -17%                               8%


                                  As in 2017, analytics, renewal of strategic procurement tools                                           Payment (including financing)                     -18%                             6%
                                                                                                                                                                                                                                                                Least likely
Digital procurement               (e.g. sourcing and supplier management) and renewal of
                                                                                                                                                            Contracting                -19%                               4%                                    Most likely
                                  operational procurement tools (e.g. requisition/ordering and
                                  payment) will have the highest impact on business over the next                                                         -25%        -20%   -15%      -10%          -5%             0%          5%          10%          15%       20%        25%
Action starts here                two years.
                                                                                                             Technology areas with most impact on business in the next two years

Industry and regional overviews
                                  There has been a reduction in the level
                                  of impact across all areas except for the                                                                             Analytics
                                                                                                                                                                                                                                                    54%
                                                                                                                                                                                                                                                                    64%

About the participants            perceived impact of robotic process                                                    Renewal of strategic procurement tools                                                                  43%
                                                                                                                           (e.g. sourcing, supplier management)                                                                                          56%
                                  automation (RPA) which has nearly                                                        Renewal of operational procurement                                                                    43%

Acknowledgements                  doubled. This increased focus on RPA                                                                   tools (e-procurement)                                                                          48%
                                                                                                                                                                                                                33%
                                  is likely to be linked to ROI and scaling                                                                ERP platform renewal
                                                                                                                                                                                                                           39%

Regional and country contacts     of RPA application.                                                                         Digital (mobile, social media, web)
                                                                                                                                                                                                    26%
                                                                                                                                                                                                                          38%
                                                                                                                                                                                                  25%
                                                                                                                                                Cloud computing
                                                                                                                                                                                                                      37%
Further insights                                                                                                                                                                              24%                                                               2018
                                                                                                                             Robotics process automation (RPA)
                                                                                                                                                                              13%
                                                                                                                                                                                                                                                                2017
                                                                                                                                                                                     18%
                                                                                                                                      Cybersecurity/data privacy
Endnotes                                                                                                                                                                                          25%
                                                                                                                Emerging technology (e.g. 3D printing, internet of             14%
                                                                                                                 things, augmented reality, cognitive computing)                       20%

                                                                                                                                                                 0%          10%           20%                 30%              40%            50%              60%            70%



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