60% of CPOs concerned by skills gap in business
Procurement is facing a talent gap that will negatively affect performance across the business sector, according to new research from Deloitte.
The 2017 Global Chief Procurement Officer (CPO) Survey found that an increasing focus on managing risk and costs across the business sector is having a profound impact on procurement operations.
For example, factors including volatile emerging markets and geopolitical uncertainty surrounding Brexit and the Euro area has led to 57% of CPOs prioritising risk management in their strategies for the coming year.
In addition, 54% of respondents expressed concern over a resurfacing of procurement-specific risks including unstable pricing, disruptions in supply and supplier bankruptcy.
Lance Younger, UK Head of Sourcing & Procurement at Deloitte, said: “Like other business leaders managing a global backdrop of economic and political risks, CPOs continue to focus on cost and risk management in 2017 to support growth in an uncertain market.
"So far, this is proving successful for CPOs, with 58% achieving better savings performance than last year. However, challenges with talent and poor adoption of digital technology still hinder progress. Unless addressed quickly, these could jeopardise the future of procurement.”
As such, future procurement strategies are reflecting the same priorities while also preparing for the impact of digitalisation - particularly in analytics and big data - as 65% of CPOs view this as the key area for development in the next two years.
Wider digital innovation and adoption is set to become a bigger part of the industry with 75% of CPOs believing that their input into delivering wider digital strategies will increase in the near future.
However, 60% of CPOs believe their teams lack the skills to deliver on these plans. A further 62% of survey respondents also claim that there is a specific need for analytical skills.
Despite increasing demand, a quarter of the businesses surveyed spend less than 1% of their budget on procurement training and development.
Lance explained: “We continue to see procurement functions shrink in size, whilst the breadth of responsibilities and expectations continue to increase.
"Companies are demanding greater productivity, but overworked employees are not the solution. Instead, new, sustainable operating models are required. One approach is to empower talent by embracing digital and innovative technologies – such as automation, cognitive procurement and analytics – at a much greater scale.”