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2012-13 Global Chief Procurement Officer Survey

Leveraging Digital Procurement and Innovation to Expand Procurement’s Business Value.

2012-13 Global Chief Procurement Officer Survey
Change is a constant for all executives and those in procurement are no exception – with a seat firmly at the cost cutting table there has rarely been a greater imperative for CPOs to expand their involvement across corporate-wide initiatives such as digital transformation, innovation driven procurement, master data management, and business process outsourcing to demonstrate the value of procurement to the enterprise. As with our previous CPO publications we will explore current trends and strategies to harness these capabilities to deliver even greater bottom line impact and why now, more than ever, the CPO is an integral part of a CEO’s overall corporate strategy.

In our commerce-driven world of double dip recession and Eurozone uncertainty, organizations are under increased pressure to instill confidence in their shareholders. In this study, we examine top trends that are essential to procurement leadership; many of these were nascent ideas even a year ago. Digitization, Innovation, Consumerization, Data Management, and the Cloud all offer avenues to increase and sustain value for both strategic and transactional procurement activities.

In light of global economic challenges, it is no surprise that 86% of participants said their annual savings target for 2012/13 is 10% or less. This goal represents tangible profit and loss savings (rather than cost avoidance which should be treated separately) and represents a decline from goals articulated in the past five years.
Business process outsourcing (BPO) for procurement, and the provision of sourcing and transactional (operational procurement) activities as a service provides significant savings to organizations; however, only 5% of participants suggest they are in the process of outsourcing their strategic sourcing function and approximately 60% of respondents do not use BPO services. Those organizations that do outsource operational procurement activities are approaching a point of saturation; however much opportunity still remains in procurement BPO for driving sourcing savings and committing these savings to the bottom line in more innovative arrangements; the ability to trust a BPO provider to deliver sourcing results is a proposition that many CPOs still wrestle with.

With the increasing popularity of social media, gamification and the digitization of everything we do and touch, it is no surprise that the translation of these tools from personal to professional use represents a real opportunity for organizations – but how applicable are these to procurement professionals? Our survey highlighted that 40% of procurement organizations are involved in augmenting their practices with digital tools, to:
- broaden and expedite communication with partners and suppliers and even potential competitors
- automate and integrate procurement tasks and procedures, e.g., predictive analytics and digital recognition in mobile sourcing
- enable procurement professionals to work anywhere, anytime

For those that wish to retain and those who seek to move into a position of procurement leadership, digital, mobile and social technologies must be integrated into their practices.

Further, 60% of our respondents highlighted a focus on corporate-wide master data management. From our recent client demand and experiences, we have seen this goal addressed through the drive to better manage and govern data to provide meaningful predictive analytics. This is most prevalent in the objective to ensure absolute clarity regarding what is purchased, from which vendors and whether in compliance with negotiated terms and conditions. While the ability to implement a 100% end-to-end procurement strategy inclusive of compliance, data quality and spend visibility is unlikely, it is encouraging that there is an increased focus on the joining the dots towards this goal; appropriately deployed digital tools will aid in the attainment of this goal, provide greater connectivity across the enterprise and, and of course enable greater savings.

To effectively analyze the output of the study, and highlight some of our market and industry thinking, we delineate recommended areas of focus through the following articles:
- Procurement Trends – The Evolution of the Procurement Organization
- Unleashing the Power of Digital Procurement
- Innovation Driven Procurement (IDP) - A New Frontier in Procurement Value
- Master Data Management – A Cornerstone of the New Procurement Organization
- Risk Management – As a Means to Increase Procurement Value

We trust that you will enjoy our fifth CPO Survey publication and look forward to your input and commentary. We certainly hope to hear those comments through one of our many digital mediums such as the Capgemini Procurement Transformation Blog

Download the report (PDF 36 pages):

Mercredi 13 Février 2013

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