Leadership: Driving innovation and delivering impact

The Deloitte Global Chief Procurement Officer Survey 2018 Consulting

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

Introduction Introduction
Executive summary
Welcome to the annual Deloitte Global Chief Procurement
Market outlook
Officer (CPO) survey. For the past seven years, our survey
has provided a global benchmark of the sentiment of
Value and collaboration
procurement leaders and an insight into the key themes and
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. 504 procurement leaders
from 39 countries took part, representing organisations with a combined annual turnover of
Action starts here $USD5.5 trillion.

Whether you are a member of the c-suite, a procurement leader, business partner, procurement
Industry and regional overviews 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 | 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 organisation’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-on-year
Overall supply chain transparency is poor with
savings performance than in 2017 Only one in four
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Action starts here 23.5% procurement leaders
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are excellent
The same as last year
business partners
Industry and regional overviews 9% contributing of procurement leaders
Worse than 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 Increasing level of

spend cycle/ownership costs competition improvement supplier collaboration

2 02
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 ...

rganisation’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%

ly chain transparency is poor with
8% 6% 5%
Innovation Leading digital Positive
9 Pages from print document to be inserted, and centred here at 100%transformation scale... disruption
Action starts here
(297x210mm)
Conversely, strategic leadership traits such as ... ... are not widely evident
33% of procurement leaders believe that their digital
procurement strategy will enable them to deliver on their 10
Industry and regional overviews
ent leaders objectives and value 010101010000111001001011001000010110101010100001110010010110010000101101010101000011100100101100100001011010101010000111001001011010100001110010010110010000101101010101000011100100101100100001011
d or no
ond their
ers ... About the participants

Acknowledgements 010101010000111001001011001000010110101010100001110010010110010000101101010101000011100100101100100001011010101010000111001001011010100001110010010110010000101101010101000011100100101100100001011

... will have the most impact on procurement in the next two years
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 Increasing level of collaboration networks
rovement supplier collaboration

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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

Executive summary
A clear shift in procurement focus towards 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 have 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 have 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 organisations that deliver an impact that matters. making
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Action starts here
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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

Endnotes to focus on executive advocacy, strategic decision making, talent capability
Overall average

and digital procurement. Three new capabilities that differentiate high

High performer
performance from the average have also emerged this year: leadership,
Digital procurement
balanced scorecards and supply chain transparency.

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

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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

06
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 towards 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 Prioritisation 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% 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
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(297x210mm)
Reducing costs New product/market development Managing risks
leaders, with 78% of respondents in
Industry and regional overviews 48% 40% 34% our survey identifying reducing cost as
their top priority strategy. Year-on-year
About the participants savings performance has improved from
58% of procurement functions in 2017
Acknowledgements to 61% 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 | 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, whilst 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 worldwide

33
45%
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
Increase threat of worldwide terrorism 23%
5 31%
0 10 15 20 25 30 35 40
2018 2017

8 08
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 focussed 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 the euro
Value and collaboration
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

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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

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

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

Acknowledgements • 73% of procurement leaders believe they have the

support of their organisation’s leadership; however the Reducing Specification Business Restructuring Reducing Outsourcing of
number of respondents who feel ‘very supported’ has total lifecycle/ improvement partnering the supply base demand non-core
ownership costs sourcing and
Regional and country contacts fallen from 43% to 31%.
procurement
activities
2018 2017
• Overall supply chain transparency is poor, with 65%
Further insights 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 organisations. This will 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 organisations’ balance 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% 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% consider themselves as ‘excellent’: although this is a
Regional and country contacts 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 compliance Supplier satisfaction 12%
Endnotes 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

73% of procurement leaders believe

Value and collaboration Shaping/changing
that they have the support of their New product
development Make vs Buy M&A Corp risk planning the way services
27% 27% are delivered
executives. 61%
Talent and leadership 49%
62% 44% 53%
54%
However, the level of support has dropped with only 31% feeling 43% 49%
‘highly supported’ as compared to 43% last year. This presents
Digital procurement a challenge for procurement leadership to develop strategies
2018 2017
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, whilst 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 organisations 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 of
11%
customer satisfaction surveys to better understand business Other
10%
Further insights 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 on 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% of procurement leaders in 2018 plan to increase
25%
Digital procurement the level of supplier collaboration as a lever to deliver value, a
decrease from 26% last year and 39% in 2016.
20%
Action starts here Despite this, procurement leaders globally have indicated a
desire to focus on collaboration and building partnerships
with key suppliers to achieve improved innovation within their 15%
Industry and regional overviews organisations, with two-thirds of respondents identifying
‘generate win-win situations and trust’ as a key approach for
doing so. 10%
About the participants

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 & Telecommunications Healthcare & Life Sciences Energy & Resources
Endnotes
Industry position in 2017 Indication of industry movement from 2017 to 2018

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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% of procurement leaders say they
Define your strategic/innovation partners 64%

Value and collaboration

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

Execute regular ‘innovation awards’ for

14%
Talent and leadership This has major implications for organisations 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 organisations 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

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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
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
programmes to enable procurement to provide strategic,
vision vendors process capabilities
Value and collaboration innovative, and end-to-end capabilities for the organisation.
It is based on the concepts of increased transparency, reduced
friction, deeper, increased leadership engagement, and adoption
Talent and leadership of new risk-reward arrangements.
Assessment Structure

Joint Strategic Planning enables

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 programme
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

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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 ...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 digitisation 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

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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 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 organisations is to lead the procurement, business, supplier and
digital agenda. However, 51% of procurement leaders do not believe that they have the capability in their teams to deliver their
Market outlook
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 organisations, the capabilities of procurement leadership are strongest in the three areas of collaboration, acting as a
role model 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
• 52% of procurement leaders are confident that their key 2%
Collaborating internally and externally to deliver value 20% 51% 21% 6%
suppliers are equipped to support their organisation’s
3%
Industry and regional overviews growth plans. High performing organisations are twice Acting as a role model for your organisational values 23% 43% 25% 6%
as likely to believe their organisations are fully equipped 3%
to succeed. Delivering results including stopping ineffective activities 14% 48% 29% 6%
About the participants 2%
• 51% of procurement leaders believe that their current Shaping and influencing future successful strategies 11% 46% 30% 11%
2%
teams do not have sufficient levels of skills and Creating alignment across the organisation to enable the
11% 45% 32% 10%
Acknowledgements capabilities to deliver on their procurement strategy. best allocation of resources and return on investments
3%
Pioneering change and inspiring others 12% 41% 34% 10%
• 72% of procurement leaders are spending less than 2% 3%
Identifying talent and optimise their current performance
Regional and country contacts of their budgets on training, an increase from 66% in whilst developing their future capability
9% 42% 33% 13%
2017. Investing in innovation that delivers competitive
8% 33% 37% 18% 4%
advantage
Further insights • Nearly three-quarters of procurement leaders have Disrupting the execution of business plans or projects
5% 28% 40% 20% 7%
to drive more value from resources and/or investments
said that their procurement teams possess little or no
capability to maximise the use of current and future Leading digital and analytical transformation 6% 21% 39% 26% 8%
Endnotes digital technologies, but only 16% of procurement 10%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
leaders are focusing on enhancing the digital skills of Fully enabling Enabling Somewhat enabling Not very enabling Not at all enabling
their teams.

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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
However leadership is weak with regard Extent to which procurement leaders are enabling their organisations 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 organisations score considerably
better across the leadership traits than their peers in other
organisations. This emphasises 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% of procurement leaders believe that their current
teams have sufficient levels of skills and capabilities to deliver
Acknowledgements
their procurement strategy. Remarkably, this is the highest level 62% 2015 38%
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 has Percentage spend on training procurement

also fallen, with 72% of procurement

Market outlook 2011 8% 30% 58% 4%
leaders spending less than two per cent
Value and collaboration
of their operating budgets on training 2012 9% 20% 68% 3%

and development programmes for their 2015 11% 23% 37% 29%

Talent and leadership

teams, compared to 66% last year. 8% 26% 41% 25%
2017

Survey results for recruiting and training talent also paint a less
2018 8% 20% 38% 34%
optimistic picture. Whilst sources of talent recruitment remained
Digital procurement
broadly unchanged since last year, 47% of procurement leaders 0% 20% 40% 60% 80% 100%
found it more difficult to attract talent in the last 12 months.
More than 4% 2-4% 1-2% Less than 1%
Action starts here
Again, analysis shows that organisations performing at a higher
level tend to spend more on training for their procurement Percentage of budget spent on training procurement talent – high performers vs average

Industry and regional overviews teams than their peers in other organisations, with almost
twice as many spending more than four per cent of their overall 40%
38%
budgets.
34%
About the participants
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% of procurement leaders are focusing on developing Area of training focus planned for 2018
digital skills within their teams, despite the fact that 72%
indicated that procurement staff possess only some or no
Market outlook
capability to maximise use of digital technologies.

Value and collaboration Another disappointing finding is the 36% 16%

lack of a clear talent development 41%
Talent and leadership strategy, with a significant reduction
year on 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
synthetisation,
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%,
which is the lowest level we have seen over the last 5 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 is 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 programme
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 organisation succeed
Only 52% of our respondents believe that leaders at their key/
strategic suppliers are equipped to help the procurement 12%
Fully equipped
Market outlook 6%
leaders organisation succeed.
49%
Equipped
46%
Value and collaboration High performing organisations 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 study4 on digitally maturing organisations shows
that to become ‘talent magnets’, and develop and retain talent,
leaders of digitally maturing organisations 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 organisations
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 organisations. 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 organisations 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
Digital procurement
in training and declining participation in talent development strategies remain a concern, suggesting that this optimism may not be sustainable
in the future.
Action starts here
From a digital perspective, the emerging technologies are exciting and if deployed successfully will bring huge advantages to procurement. However, technology
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
Industry and regional overviews the technology but also how to deploy it, draw conclusions from the data and implement new strategies for the tangible benefit of the organisation. It remains
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 Partner and Global Head of
It is increasingly important, to attract talent, for organisations to be seen to move in the digital space. If a business is investing in the latest technologies, this Practice, Procurement and
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 in Supply Chain,
Acknowledgements technology. Top talent, especially those in the millennial generation, will not choose to work in an organisation that is significantly behind the latest trends and Odgers Berndston
technologies.

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

Further insights
Invest in your teams, invest 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 learnt that
Market outlook I always need to understand the 3 Ps; People, Processes and how to develop a
Programme 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 learnt 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 recognising digital technologies, their impact and imminent uses, few organisations 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 Digitalisation
The survey shows: The level and speed of digitalisation across procurement functions is lower than expected and needed. Only four per cent of
procurement leaders believe that procurement has a big influence in delivering their organisation’s overall digital strategy and only
Talent and leadership • 17% of procurement leaders do not have a digital 6% of the procurement leaders in the survey believe that their digital procurement strategy will help them to fully deliver on their
procurement strategy, and of those that do, less than one- objectives and improve enterprise value. Only 18% of procurement leaders have a digital procurement strategy supported by a
third believe that their strategy will enable procurement complete business case.
Digital 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 amongst

1%

organisations is highest in the transactional Purchase to 4% 5% 6%

13%
4%
4%
Pay (P2P) process, followed by sourcing and tactical buying. 18%
10%
Industry and regional overviews 4%
20%
• Analytics will have the most impact on procurement in the 26% 27%
next two years.
About the participants
19%
• Analytics are being used for cost optimisation (50%),
25%
process improvement (48%) and management reporting
Acknowledgements (45%). 39%

• Only three per cent of procurement leaders believe their

Regional and country contacts staff possess all the skills required to maximise use of
44% 31%

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 need to 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
organisations 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 utilising
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 decentralised ledgers . Monitoring sustainability using
automated reporting/visualisation
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 analysed to ensure workforce is optimally utilised

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 risk
Acknowledgements
management and supplier management are the least digitised
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
66% of procurement leaders predict that supplier management Aspects of the procurement process expected to be most significantly impacted by technology in the next 5 years
(including performance, risk, relationship and innovation), Business planning; strategy development (including spend
-18% 24%
sourcing and operational buying, and business planning and
Market outlook analytics and research)
strategy development (including spend analytics and research)
Sourcing and operational buying -5% 22%
will undergo the biggest changes due to digital technology over
Supplier management (including performance, risk,
Value and collaboration the next five years. Having said that, 18% of procurement leaders -9% 20%
relationship and innovation)
also indicated that business planning and strategy development
Requisition/ordering -14% 16%
(including spend analytics and research) is the least likely to
Talent and leadership 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 is tools (e-procurement) 48%

33%
likely to be linked to ROI and scaling of ERP platform renewal
39%

Regional and country contacts 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 (IoT), augmented reality, cognitive computing) 20%

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

30 30
Leadership: Driving innovation and delivering impact
impact | The Deloitte Global Chief Procurement Officer
Officer Survey 2018

Introduction

Executive summary
Procurement leaders have indicated that the top three Extent to which the following technologies currently used in procurement
technologies currently being used are collaboration networks
and B2B markets, predictive / advanced analytics, and Collaboration networks and B2B markets 4% 16% 14% 27% 39%
Market outlook
visualisation. However, there are significant numbers of
Predictive/advanced analytics 3% 13% 18% 32% 34%
procurement leaders that are not considering or applying new
technologies at all, i.e. 66 to 94% across all technologies. This
Value and collaboration Robotics 7% 17% 21% 54%
adoption rate is also notably lower than the application of new
technologies across other functions.5 Intelligent content extraction 2% 8% 12% 22% 55%

Talent and leadership Visualisation 2% 9% 11% 15% 63%

Data transparency is a key outcome of digital transformation.
Digital procurement solutions enable better data-driven insights AI/cognitive 2% 5% 12% 27% 55%

Digital procurement through analysis of previously unavailable data, leading to more

Cyber tracking 4% 5% 5% 17% 70%
effective use of resources, efficient operations and better-
informed decision making. Sensors/wearables 4% 7% 12% 76%
Action starts here
Procurement leaders globally recognise 3D printing 3% 2% 6% 11% 78%

Industry and regional overviews the power of better data-driven insights: Crowdsourcing 3% 5% 18% 72%

50% of respondents indicated that they Blockchain 6% 17% 75%

About the participants are proactively leveraging intelligent Virtual/augumented reality 2% 3% 11% 83%

and advanced analytics for cost 0% Fully deployed

10% 20%Scaling 30% Pilot40% 50%
Being 60%
considered 70%
Not at all 80% 90% 100%

Acknowledgements optimisation, and 48% process efficiency

improvement (although both these Main purposes for leveraging data analytics

Regional and country contacts percentages are lower than last year).
2%
There is also a strong focus on using analytics for management
Further insights reporting and procurement operations improvement, reinforcing 50% 48% 42% 32% 32% 24% 15% 12% 9%

the procurement efficiency objectives.

Endnotes
Intelligent and Process Management Procurement Market Supplier Improve Predictive Improve Other
advanced efficiency reporting operations intelligence portfolio fraud supplier quality
analytics improvement improvement optimisation detection quality terms and
for cost and risk conditions
optimisation management

31
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
Over 45% of procurement leaders believe lack of integration Main barriers to the effective application of digital technology in procurement
and poor quality data are key barriers to the effective application
of digital technology in procurement, and the problem is
Market outlook
accentuated by a reduction in stakeholder endorsement and
prioritisation.
Value and collaboration
Although there are challenges and barriers to the application
and adoption of technology, some organisations are scaling
Talent and leadership their digital plans. Digitally maturing organisations are better
at planning a long-term digital strategy, investing adequately,
attracting talent and developing a digital culture. Additionally,
Digital procurement it is critical to implement digital strategy in an agile manner and
scale small experiments into enterprise-wide initiatives. Lastly,
leadership is another key success factor, where leaders have a
Action starts here vision and a willingness to commit resources to execute their
digital strategy.4 46% 45% 30% 29%
Lack of Quality Limited senior Skills/
data of data stakeholder capability
Industry and regional overviews integration endorsement of analytics
and prioritisation resources

About the participants

Acknowledgements

Regional and country contacts

27% 24% 24% 20% 18% 7%

Further insights Limited Availability Poor Availability Technology Other
understanding/ of analytics systems of data
knowledge resource adoptions
of data
Endnotes technology

Data People Systems

32 32
Leadership: Driving innovation and delivering impact
impact | The Deloitte Global Chief Procurement Officer
Officer Survey 2018

Introduction ...and finally

Executive summary
“Digitisation is a key topic for firms in all industry settings in the years to come.
Market outlook Procurement needs to take an active role in shaping the digital journey both within
the firm and at the interface to the key suppliers. This will strengthen the role of the
Value and collaboration
procurement function as a valued business partner.”
Talent and leadership
Mag. Brigitte Schuessler,
Chief Procurement Officer, OEBB-Holding AG
Digital procurement

Action starts here

Industry and regional overviews

About the participants

Acknowledgements

Regional and country contacts

Further insights

Endnotes

33
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 Action starts here

Executive summary
We have proposed a number of actions for leaders to consider and weave into their future and current strategic plans.
Market outlook

Value and collaboration

Talent and leadership

Digital procurement
Market outlook Value and collaboration Talent and leadership Digital procurement

Action starts here 1. Adopt a flexible, risk-adjusted 4. Understand and deliver on executive 8. Develop and implement a talent 12. Develop a dynamic, bi-modal digital
approach to supply chain objectives strategy and plan procurement vision, strategy and
management plan
Industry and regional overviews 5. Improve supplier and business 9. Accelerate development of
2. Significantly strengthen business collaboration through Joint Strategic leadership in procurement and at 13. Deliver digital transformation in an
partnerships and involvement in Planning approach suppliers agile way
About the participants strategic decision making
6. Work with strategic suppliers to 10. Invest in training and new skill 14. Commit resources for technology
3. Introduce more channels for supplier build a more secure and transparent development adoption
Acknowledgements and procurement innovation supply chain
11. Establish or join collaboration 15. Digitalise processes that accentuate
7. Continue to develop and further align networks with suppliers and other the organisational objectives
Regional and country contacts procurement balanced score cards to subject matter experts
business objectives 16. Accelerate analytics and RPA
capabilities
Further insights

Endnotes

34 34
Leadership:
Leadership:Driving
Drivinginnovation and
innovation delivering
and impact
delivering impact| The Deloitte
| The Global
Deloitte Chief
Global Procurement
Chief Officer
Procurement Survey
Officer 2018
Survey 2018

Introduction

Executive summary Industry and

Market outlook regional overviews
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

35
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 Industry – Business and Professional Services

Executive summary
49 respondents
Industry radar -Business and Professional Services

Market outlook
Year-on-year savings performance has Value and collaboration
Market outlook
improved with 70% of procurement • 23% of procurement leaders believe the
leaders indicating better performance Executive Leadership effectiveness of their procurement function as a
than last year – higher than the global advocacy business partner is ‘excellent’.
Value and collaboration average of 61%.
• However, a greater proportion in Business and
Procurement leaders in this industry Professional Services (12% compared to 6% across
identified reducing costs (73%) as the all respondents) see the effectiveness as poor,
Talent and leadership top business strategy priority; last year, indicating that this is an area for improvement.
it was the fifth-most important, indicating
• Fewer procurement leaders feel they have a high
a change of priorities within this industry.
level of support from executives than last year (30%
Digital procurement in 2018, compared to 35% in 2017).
• Only 20% of procurement leaders have said that
they have good or full transparency below tier 1
Balanced Strategic suppliers.
Action starts here scorecard decision
making

Industry and regional overviews 100 75 50 25 25 50 75 100 Talent and leadership

• 47% of procurement leaders believe their teams
have the necessary skills to deliver on their
procurement strategy; a dramatic increase from last
About the participants
year’s 29%.
• 53% of procurement leaders are focusing on
technical procurement skills in this industry as
Acknowledgements compared to the global average of 41%.

Regional and country contacts Supply Digital procurement

Talent
chain capability • 25% of procurement leaders believe that their
transparency
digital procurement strategy helps procurement
Further insights deliver on its objectives and improve enterprise
value. In contrast, 22% procurement leaders have
no approved digital strategy in place.

Endnotes • Procurement leaders in the Business and

Business and Professional Services Professional Services industry rate quality of data
as the greatest barrier to implementing digital
technology, ahead of lack of data integration.
High performer
Digital procurement

36 36
Leadership: Driving innovation and delivering impact
impact| The Deloitte Global Chief Procurement Officer
Officer Survey 2018

Introduction Industry – Consumer Business

Executive summary
86 respondents
Market outlook
Year-on-year savings performance has Value and collaboration
Market outlook
improved with 74% procurement leaders
• 36% of procurement leaders believe that their
indicating better performance than in the
Executive Leadership procurement function is highly effective, and that
previous year, compared to 61% in 2017.
advocacy procurement is highly regarded internally and seen
Value and collaboration Consumer Business procurement as a key business partner contributing significant
leaders identified reducing costs (75%), strategic value – significantly higher than the overall
introducing new product/services or response of 24%.
Talent and leadership expanding into new markets (67%) and • 37% of procurement leaders feel they have a high
expanding organically (60%) as their top level of support from executives: this is lower
three priorities. The priority for managing compared to last year when 44% of procurement
risks (42%) is significantly lower than the leaders in Consumer Business felt their executives
Digital procurement global result of 54%. were very supportive.
• 39% of procurement leaders said that they have
Balanced Strategic ‘good’ or ‘full’ transparency below tier 1 suppliers.
Action starts here scorecard decision This is higher than the global average of 34%.
making

Industry and regional overviews 100 75 50 25 25 50 75 100 Talent and leadership

• 56% of procurement leaders believe their teams
have the necessary skills to deliver on their
About the participants procurement strategy. This is a huge improvement
when compared to last year’s global average of 40%.

Acknowledgements
Digital procurement
• Only 18% of procurement leaders believe that their
Regional and country contacts Supply digital procurement strategy helps procurement
Talent
chain capability deliver on its objectives and improve enterprise
transparency value. 15% of procurement leaders have no
approved digital strategy in place.
Further insights
• More procurement leaders in this industry see
analytics as a technology with a major impact (66%
compared to the overall survey response of 54%).
Endnotes
Consumer Business

High performer
Digital procurement

37
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 Industry – Energy and Resources

Executive summary
60 respondents
Market outlook
50% of procurement leaders indicated Value and collaboration
Market outlook
improvement on the previous year
• 27% of procurement leaders believe their
savings but this is significantly lower than
Executive Leadership procurement function is highly effective, and that
the global average of 61%. advocacy procurement is highly regarded internally and seen
Value and collaboration Only 9% of procurement leaders as a key business partner contributing significant
indicated that they do not have any strategic value.
formal performance tracking mechanism • The level of executive support seems to have fallen
Talent and leadership in place. This is the lowest across all significantly, with only 35% of procurement leaders
industries. feeling their executives are ‘very supportive’ in 2018,
Reducing costs continues to be the top as compared to 50% last year.

Digital procurement priority for procurement leaders in this • Physically locating the procurement function within
industry (89%); this is higher than the business functions is a strategy to understand
global average of 78% stakeholder requirements: it is used much more in
for survey respondents Balanced Strategic this industry (67%) compared to other industries
Action starts here as a whole. scorecard decision (45%).
making

Industry and regional overviews 100 75 50 25 25 50 75 100 Talent and leadership

• Only 22% of procurement leaders believe their
teams have the necessary skills to deliver on their
About the participants procurement strategy. This is lowest across all
industries.
• This is despite a higher-than-average spend on
Acknowledgements training in technical procurement skills (49%
compared to 41% in other industries).

Regional and country contacts Supply Talent Digital procurement

chain capability
transparency • Only 18% of procurement leaders believe that their
digital procurement strategy helps procurement
Further insights
deliver on its objectives and improve enterprise
value. 13% of procurement leaders have no
approved digital strategy in place.
Endnotes • Quality of data (61%), and not lack of data
Energy and Resources
integration, is seen as the largest barrier to the
implementation of digital technologies.
High performer
Digital procurement

38 38
Leadership: Driving innovation and delivering impact
impact| The Deloitte Global Chief Procurement Officer
Officer Survey 2018

Introduction Industry – Financial Services and Insurance

Executive summary
65 respondents
Market outlook
Year-on-year savings performance has Value and collaboration
Market outlook
improved with 69% of procurement
• The level of executive support in this industry
leaders indicating better performance
Executive Leadership seems to have dropped significantly, with only 33%
than last year. advocacy of procurement leaders in 2018 feeling that their
Value and collaboration Managing risks (81%) has now surpassed executives are ‘very supportive’, as compared to
reducing costs as the industry’s key 47% last year. No procurement leaders felt ‘not at all’
business strategy. supported.
Talent and leadership Increasing cash flow is again a lower • 41% of procurement leaders have said that they
priority this year, with only 8% saying have good or full transparency below tier 1 suppliers.
that it is a strong business priority. This This is higher than the global average of 34%.

Digital procurement is dramatically below the 40% of survey

respondents as a whole.

Strategic
Talent and leadership
Balanced
Action starts here scorecard decision • 60% of procurement leaders believe their teams
making have the necessary skills to deliver on their
procurement strategy. This represents a significant
Industry and regional overviews 100 75 50 25 25 50 75 100 year-on-year improvement from 21% in 2015 and
36% in 2017, and is 11% higher than the current
average across all industries.
• Outsourcing as a procurement lever has fallen and
About the participants is now in line with the cross-industry average (10%);
last year, at 22% it was 10% higher than the overall
average.
Acknowledgements

Digital procurement
Regional and country contacts Supply • 32% of procurement leaders believe that their
Talent
chain capability digital procurement strategy helps procurement
transparency deliver on its objectives and improve enterprise
Further insights value. In contrast, 12% of procurement leaders have
no approved digital strategy in place.
• Cloud computing is seen as the technology area
with the biggest impact, ahead of data analytics.
Endnotes Many more procurement leaders (40%) attach
Financial Services and Insurance
importance to cybersecurity and data privacy
compared with the overall average of 18%.
High performer Digital procurement

39
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 Industry – Government and Public Sector

Executive summary
28 respondents
Market outlook
Procurement leaders have differing Value and collaboration
Market outlook
views about savings performance: 50%
• 26% of procurement leaders believe that their
indicated improvement on the previous
Executive Leadership procurement function is highly effective, and that
year savings. This is significantly lower
advocacy procurement is highly regarded internally and seen
Value and collaboration than the global average of 61%.
as a key business partner contributing significant
strategic value. This is marginally above the overall
Reducing cost (76%) has surpassed
average of 24%.
managing risk (64%) as the most
Talent and leadership important business strategy. Increasing • Supplier performance and internal customer
cash flow (4%) and expanding organically satisfaction (both at 78%) are the most important
(0%) are both significantly below measures in procurement balanced scorecards for
the overall averages (40% and 48% this industry. For survey respondents as a whole,
Digital procurement respectively). these are the fourth and sixth most important (at
67% and 56% respectively).

Balanced Strategic
Action starts here scorecard decision
making Talent and leadership
• 45% of procurement leaders believe their teams
Industry and regional overviews 100 75 50 25 25 50 75 100 have the necessary skills to deliver on their
procurement strategy, a significant increase from
27% last year.
About the participants • All 28 respondents indicated that they had specific
areas of training focus – with 50% indicating training
in technical procurement skills as the most
important (9% above the overall average).
Acknowledgements

Regional and country contacts Supply

Digital procurement
Talent
chain capability • 39% of procurement leaders believe that their
transparency digital strategy helps procurement deliver on
Further insights its objectives and improve enterprise value. In
contrast, 18% procurement leaders have no
approved digital strategy in place.
• Cloud computing (at 57%) is the most important
Endnotes
Government and Public Sector technology area – 32% more than the cross-industry
average.

High performer
Digital procurement

40 40
Leadership: Driving innovation and delivering impact
impact | The Deloitte Global Chief Procurement Officer
Officer Survey 2018

Introduction Industry – Healthcare and Life Sciences

Executive summary
45 respondents
Market outlook
Year-on-year savings performance has Value and collaboration
Market outlook
improved, with 70% of procurement • 25% of procurement leaders believe that their
leaders indicating better performance Executive Leadership procurement function is highly effective, and that
than last year – this is 9% above the advocacy procurement is highly regarded internally and seen as a key
Value and collaboration average for procurement leaders in all business partner contributing significant strategic value.
industries.
• 88% of the respondents say procurement team members
Consistent with the overall global results, are embedded in cross-functional teams to better
Talent and leadership 78% of procurement leaders have also understand internal stakeholder requirements. This is
identified reducing costs as their top highest across all industries.
priority business strategy.
• Surprisingly, only 26% of procurement leaders have said that
Digital procurement they have ‘good’ or ‘full’ transparency below tier 1 suppliers.
This is significantly lower than the global average of 34%.
72% reported limited transparency.
Balanced Strategic
Action starts here scorecard decision
making
Talent and leadership

Industry and regional overviews 100 75 50 25 25 50 75 100 • 44% of procurement leaders believe their teams have the
necessary skills to deliver on their procurement strategy,
continuing the trend of year-on-year increases since 2014.
• Only 50% of procurement leaders in this industry spend at
About the participants
least one per cent of their budget on training.
• Outsourcing is used by 15% of procurement leaders as
a procurement lever: this is 5% higher than the cross-
Acknowledgements industry average.

Regional and country contacts Supply Digital procurement

Talent
chain capability • 29% of procurement leaders believe that their digital
transparency
procurement strategy helps procurement deliver on its
Further insights objectives and improve enterprise value. Only 9% procurement
leaders have no approved digital strategy in place.
• ERP platform renewal (44%) is the second-most impactful
Endnotes technology area (after analytics at 56%): this is 11% higher
Healthcare and Life Sciences than the overall average.
• Management reporting (53%) is the most leveraged use of
High performer analytics/data mining in this industry.
Digital procurement

41
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 Industry – Manufacturing

Executive summary
108 respondents
Market outlook
Only 48% of procurement leaders in the Value and collaboration
Market outlook
manufacturing industry rated their 2018
• Only 23% of procurement leaders feel ‘highly
performance better than last year. This is
Executive Leadership supported’ by their executives. This is the lowest
the lowest across industries, and below
advocacy across all industries.
Value and collaboration the overall average of 61%.
• 36% of procurement leaders have said that they
Procurement leaders in this industry have ‘good’ or ‘full’ transparency below tier 1
have identified reducing costs as their suppliers – marginally higher than the average
Talent and leadership top business strategy (76%). New (33%).
products/services/markets is in second
place – at 58% this is 10% above the
cross-industry average.
Digital procurement Talent and leadership
• 55% of procurement leaders believe their teams
Balanced Strategic have the necessary skills to deliver on their
Action starts here scorecard decision procurement strategy. This is not only higher than
making the current average (49%), but the highest it has
been in this industry in all years of the Deloitte CPO
Survey.
Industry and regional overviews 100 75 50 25 25 50 75 100
• The percentage of procurement leaders in this
industry spending at least one per cent of their
budget on training has increased from 68% last year
About the participants to 73%. This is in contrast to the average trend of a
decrease from 2017 to 2018

Acknowledgements
Digital procurement
• 28% of procurement leaders believe that their
Regional and country contacts Supply Talent digital procurement strategy helps procurement
chain capability deliver on its objectives and improve enterprise
transparency value. In contrast, 17% of procurement leaders have
Further insights no approved digital strategy in place.
• Renewal of operational tools, not analytics, is seen
by procurement leaders in this industry as the
technology area with the biggest impact
Endnotes
Manufacturing • Quality of data (51%) is seen as the biggest barrier to
implementing digital technologies in this industry.
High performer
Digital procurement

42 42
Leadership: Driving innovation and delivering impact
impact | The Deloitte Global Chief Procurement Officer
Officer Survey 2018

Introduction Industry – Technology, Media and Telecommunications

Executive summary
46 respondents
Market outlook
59% of procurement leaders rated their Value and collaboration
Market outlook
2018 performance better than last year –
• Only 16% of procurement leaders believe that their
slightly below the overall average of 61%.
Executive Leadership procurement function is highly effective, and that
Despite the priority given to reducing advocacy procurement is highly regarded internally and seen
Value and collaboration costs (84%) being higher than the overall as a key business partner contributing significant
average, it has declined in importance strategic value – below the average of 24% for all
since last year (91%). industries.
Talent and leadership Consolidating spend continues to be the • The level of executive support in this industry seems
most important procurement lever (50%), to have fallen significantly, with only 27% of
being 12% above the overall average. procurement leaders in 2018 feeling their executives
are ‘very supportive’, as compared to 42% last year.
Digital procurement No procurement leaders feel ‘not at all’ supported.

Balanced Strategic
Action starts here scorecard decision Talent and leadership
making
• Only 46% of procurement leaders believe their
teams have the necessary skills to deliver on their
Industry and regional overviews 100 75 50 25 25 50 75 100 procurement strategy; this percentage has been in
decline since 2014.
• 11% of procurement leaders in this industry have
About the participants no formal training planned: this is higher than the
overall average of 7%, indicating this may be an area
for improvement in future.

Acknowledgements

Digital procurement
Regional and country contacts Supply • 35% of procurement leaders believe that their
Talent
chain capability digital procurement strategy helps procurement
transparency deliver on its objectives and improve enterprise
Further insights value. In contrast, 13% of procurement leaders have
no approved digital strategy in place.
• Analytics is seen as the most impactful technology
area (60%) – higher than average of 54% for all
Endnotes industries.
Technology, Media and Telecommunications

High performer
Digital procurement

43
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 Regional overview

Executive summary
North America South America EMEA Asia Pacific
% respondents Change from % respondents Change from % respondents Change from % respondents Change from
Market outlook Key measures last year last year last year last year

Better savings performance compared to last year 71% 73% 56% 68%
Market outlook
Value and collaboration
Cost reduction as a top priority 81% 91% 76% 78%

Talent and leadership Value and

Excellent business partnering 30% 27% 21% 33%
collaboration
Very supportive executive 48% 32% 25% 40%
Digital procurement Talent and leadership Capabilities exist to deliver strategy 50% 72% 49% 39%

Digital procurement
Impact of analytics on the business in the 70% 26% 52% 54%
Action starts here next 2 years

Industry and regional overviews

Year-on-year savings The South America Reducing costs In Asia Pacific only
performance in region has seen a (76%), introducing 39% of procurement
About the participants North America has huge upswing in new product/ leaders believe they
improved, with 71% savings, with 73% services or have capability to
Acknowledgements of procurement of procurement expanding into deliver their strategy.
leaders indicating leaders indicating new markets (62%)
Regional and country contacts better performance better performance and managing risk
than last year – ten than last year, as (53%) are the top
Further insights percent higher than compared to 43% in three priorities
the global average. 2017. for procurement
leaders in the EMEA
Endnotes
region.

44 44
Leadership: Driving innovation and delivering impact
impact | The Deloitte Global Chief Procurement Officer
Officer Survey 2018

Introduction Regional – North America

Executive summary
88 respondents

Market outlook Market outlook Talent and leadership

• Year-on-year savings performance has improved, with 71% of • 50% of procurement leaders believe their teams have the
Value and collaboration procurement leaders indicating better performance than last necessary skills to deliver on their procurement strategy. This
year – 10% higher than global average is a significant improvement when compared to last year’s
average of 43%. This also continues the improvement trend
• Consistent with the overall global results, North America’s
Talent and leadership seen since 2014, and exceeds the previous high of 48% in 2013
procurement leaders have also identified reducing costs (81%),
managing risk (56%) and introducing new product/services or • Use of outsourcing as a procurement lever is slightly below
expanding into new markets (55%) as their top three priorities. average in North America (8% compared to 10% globally)
Digital procurement However, the percentage attributed to improving cash flow
(52%) is 12% higher than the overall average Digital procurement

Action starts here • 44% of procurement leaders believe that their digital strategy
Value and collaboration helps procurement deliver on its objectives and improve
• 30% of procurement leaders in this region believe that their enterprise value. In contrast, 14% procurement leaders have
Industry and regional overviews procurement function is highly effective and that procurement no approved digital strategy in place
is highly regarded internally and seen as a key business partner
• Payment and requisition/ordering processes have seen the
contributing significant strategic value – this is six percent
highest rate of digital technology adoption
About the participants above global average
• Analytics (at 70%) is seen by a greater proportion of
• 67% of respondents in this region have procurement team
procurement leaders as the most impactful technology area,
members embedded in cross-functional teams to better
Acknowledgements compared to the global average (54%)
understand internal stakeholder requirements – whilst the
most widely-adopted strategy in the region, this is still lower
than the global average for this strategy (76%)
Regional and country contacts
• North American procurement leaders rank cost avoidance as
the second-most important measure in their organisation’s
Further insights balanced scorecard (76%, behind OPEX savings at 84%).
This is above the overall global average (69% and third-most
important)
Endnotes

45
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 Regional – South America

Executive summary
25 respondents

Market outlook Market outlook Digital procurement

• This region has seen a huge upswing in savings, with 73% of • 47% of procurement leaders believe that their digital strategy
procurement leaders indicating better performance than last helps procurement deliver on its objectives and improve
Value and collaboration
year, as compared to 43% in 2017 enterprise value. In contrast, 11% of procurement leaders have
no approved digital strategy in place
• Reducing costs is the strongest priority (at 91%) – and
Talent and leadership interestingly, no procurement leaders said that reducing • Analytics is seen as a much less impactful technology area in
cost is not a priority. This increased focus on reducing cost this region than globally (26% compared to 54%). In an almost
seems to have yielded better performance than last year for mirror-image, cloud computing is seen as the most impactful
Digital procurement procurement leaders in South America technology amongst South American procurement leaders
(53%), compared to only 25% globally
Value and collaboration
Action starts here
• OPEX savings, cost avoidance and operational efficiency
(all at 74%) are the top measures forming an organisation’s
procurement balanced scorecard. Supplier performance (at
Industry and regional overviews
42%) is significantly lower than the overall global average of
67%. Internal customer satisfaction on the other hand (second,
About the participants at 68%) is higher than the average of 56%

• The level of executive support in this region has improved

significantly, with 32% of procurement leaders in 2018 feeling
Acknowledgements their executives are ‘very supportive’, as compared to 19% last
year

Regional and country contacts Talent and leadership

• 72% of procurement leaders believe their teams have the
necessary skills to deliver on their procurement strategy –
Further insights
much higher than the overall average of 49%

• This is despite a lower-than-average number of procurement

Endnotes leaders reporting that at least one per cent of their budget was
spent on training (56%)

46 46
Leadership: Driving innovation and delivering impact
impact | The Deloitte Global Chief Procurement Officer
Officer Survey 2018

Introduction Regional – EMEA

Executive summary
327 respondents

Market outlook Market outlook Talent and leadership

• 56% of procurement leaders indicated an improvement on the • 49% of procurement leaders believe their teams have the
previous year savings; however this is lower than the global necessary skills to deliver on their procurement strategy. This
Value and collaboration
average of 61% is a huge improvement when compared to last year’s regional
average of 38%
• Reducing costs (76%), introducing new product/services or
Talent and leadership expanding into new markets (62%) and managing risk (53%) are • Use of outsourcing as a procurement lever has remained
the top three priorities for procurement leaders in this region – constant since last year (at 10%) – halting a decline from 14%
this is largely in line with the global results in 2015
Digital procurement
Value and collaboration Digital procurement
• 21% of procurement leaders in this region believe that their • 31% of procurement leaders believe that their digital
Action starts here
procurement function is highly effective and that procurement procurement strategy helps procurement deliver on its
is highly regarded internally and seen as a key business partner objectives and improve enterprise value
contributing significant strategic value – this is lower than the
Industry and regional overviews • Payment and requisition/ordering processes have seen the
global average of 24%
highest rate of digital technology adoption, with analytics
• The level of executive support in this region seems to have regarded as the most impactful technology area (54%)
About the participants dropped significantly, with only 25% of procurement leaders
in 2018 feeling that their executives are ‘very supportive’, as
compared to 40% last year
Acknowledgements
• 82% of respondents (higher than the overall average of 76%)
rate having procurement team members embedded in cross-
Regional and country contacts functional teams as the most important strategy to better
understand internal stakeholder requirements

Further insights

Endnotes

47
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 Regional – Asia Pacific (APAC)

Executive summary
64 respondents

Market outlook Market outlook Talent and leadership

• Year-on-year savings performance has improved, with 68% • Only 39% of procurement leaders believe their teams have the
indicating better performance than last year necessary skills to deliver on their procurement strategy. This is
Value and collaboration
the lowest across all regions. However this continues year-on-
• Reducing costs (78%), managing risk (59%) and introducing new
year growth since 2014, when the percentage was just 19%
product/services or expanding into new markets (59%) are the
Talent and leadership top three priorities for procurement leaders in this region – • 56% of procurement leaders state that at least one per cent
keeping the same order as last year of their budget is spent on training. The fact that this is down
from 78% last year indicates that the focus is elsewhere.
Digital procurement Value and collaboration
• 33% of procurement leaders in this region believe that their Digital procurement
procurement function is highly effective and that procurement • Only 19% of procurement leaders believe that their digital
Action starts here
is highly regarded internally and seen as a key business partner strategy helps procurement deliver on its objectives and
contributing significant strategic value – this is higher than the improve enterprise value. A huge 32% of procurement leaders
global average of 24% indicating that they have no approved digital strategy in place
Industry and regional overviews
• 61% of respondents in this region have procurement targets • Payment and requisition/ordering processes have seen the
jointly owned with other internal stakeholders to better highest rate of digital technology adoption
About the participants understand internal stakeholder’s requirements and drive
• The quality of data, and not the lack of data integration, is seen
value – this score in APAC is 10% higher than the overall
as the biggest barrier to implementing digital technologies in
average across the survey
Acknowledgements this region
• 40% of procurement leaders feel they have a high level of
support from executives. No respondents feel that executives
Regional and country contacts are ‘not at all’ supportive

Further insights

Endnotes

48 48
Leadership: Driving innovation and delivering impact
impact | The Deloitte Global Chief Procurement Officer
Officer Survey 2018

Introduction About the participants

Executive summary
Responses by geography Response by industry Third party spend by Turnover by industry
industry (US$bn) (US$bn)

Market outlook 108 477 1129

Value and collaboration 86 445 1004

327
88
Talent and leadership
64 65 304 910

60 295 826
Digital procurement

Action starts here 25 49 260 701

46 251 487
Responses year on year
Industry and regional overviews

480 504 45 153 282

About the participants 239 324

Respondents 183 28 29 82
2013 2014 2016 2017 2018
Acknowledgements
Countries 17 25
12 26 57

33 36 39
Regional and country contacts

23 Manufacturing Technology, Media and Telecommunications

Further insights
Consumer Business Business and Professional Services
103 >US$50bn
Responses by 158
organisation
<US$10bn-US$50bn Financial Services and Insurance Government and Public Sector
Endnotes
turnover <US$1bn-US$10bn
Healthcare and Life Sciences Real Estate
<US$1bn

220
Energy and Resources

49
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 Acknowledgements
Executive summary
About Deloitte About Odgers Berndston
Deloitte provides audit, tax, consulting, financial advisory, and Our team of over 1,000 dedicated procurement specialists Odgers Berndston provides Executive and Director level
risk management related services to public and private sector globally help the world’s largest and most complex search solutions to organisations throughout the world.
Market outlook
clients spanning multiple industries. With a globally connected procurement functions across all industries with procurement We operate as a collection of independent businesses with
network of member firms in more than 150 countries and strategy, functional and digital transformation, supplier over 250 partners combining to provide world-class executive
territories, and employing over 245,000 professionals, Deloitte management and cost, risk and value delivery. search services. Our flat business structure and collaborative
Value and collaboration
brings world-class capabilities and high-quality service to nature ensure that all of our clients have access to the relevant
clients, delivering the insights they need to address their The Deloitte Global Chief Procurement Officer Survey 2018 expertise, new and inventive ideas, and a diverse pool of
Talent and leadership most complex business challenges and making an impact that is authored by Lance Younger, Iain Kirwan and Pragya talent. Our reputation at the top of the executive search
matters. Chaturvedi, with support from the core CPO survey team profession is over 50 years old. Our experienced executive
of Eleanor Foster-Gregg, Darius Atashroo, Pippa Gillibrand, search specialists operate with absolute discretion, integrity
Digital procurement Deloitte is named a global leader in breadth of services Michal Syga, Alison Robertson and Harriet Burnham. and care, and are experts in finding exceptional individuals
in both Procurement Operations, and General Sourcing for challenging roles. We have the support of an excellent
Strategy Consulting by Kennedy Research. “With the international network of more than 50 offices on the ground
Action starts here broadest offering in the competency area, Deloitte combines expanding across more than 28 countries globally.
functional specialisation with strength across the spectrum of
procurement assets. The firm also leads in the development
Industry and regional overviews of proprietary tools designed to fill gaps in the asset portfolio
and accelerate diagnostics during engagement delivery”.

About the participants ALM Intelligence (formerly Kennedy) have also named Deloitte
as the undisputed global leader in their report entitled Supply
Chain Risk Management Consulting 2016. “Deloitte is at the
Acknowledgements forefront of the movement to transition companies’ supply
chain risk management out of its traditional functional silos
and into a competency that not only cuts across functional
Regional and country contacts lines, but also is embedded vertically at all levels of the
organisation.”

Further insights Deloitte’s Supply Chain practice focuses on delivering

strategy-driven value through advisory services to optimise
and improve the supply chain.
Endnotes

50 50
Leadership: Driving innovation and delivering impact
impact | The Deloitte Global Chief Procurement Officer
Officer Survey 2018

Introduction Regional and country contacts

Executive summary
Global Lead Argentina Czech Republic Mexico South East Asia
Brian Umbenhauer Pablo Peso Lukas Jilek Xavier Ordonez Atul Jain
[email protected] [email protected] [email protected] [email protected] [email protected]
Market outlook
EMEA Lead Austria Denmark Netherlands Spain
Lance Younger Alexander Kainer Tore Christian Jensen Michiel Junge Fernando Antolin
Value and collaboration
[email protected] [email protected] [email protected] [email protected] [email protected]

Talent and leadership APAC Lead Australia France New Zealand Sweden
John O’Connor John O’Connor Magali Testard Paul Shallard Patrik Andersson
[email protected] [email protected] [email protected] [email protected] [email protected]
Digital procurement
North America Lead Belgium Finland Norway Switzerland
Lee Barter Patrick Vermeulen Mikko Vaara Karl Martin Karlsen Alex Nedelchev
Action starts here [email protected] [email protected] mikko.vaara@deloitte.fi [email protected] [email protected]

Latin America Lead Canada Germany Poland United Kingdom

Industry and regional overviews Xavier Ordonez Lee Barter Nikolaus Helbig Jakub Rosiecki Lance Younger
[email protected] [email protected] [email protected] [email protected] [email protected]

About the participants Odgers Berndston Chile Italy Portugal United States
Lucy Harding Pablo Tipic Michele Sabatini Diogo Nuno Santos Michael Daher
[email protected] [email protected] [email protected] [email protected] [email protected]
Acknowledgements
China India Russia Venezuela
Ge Liang Gong Antony Prashant Irina Biryukova Carlos Ramirez
Regional and country contacts [email protected] [email protected] [email protected] [email protected]

Croatia Japan South Africa

Further insights Zlatko Bazianec Yuichi Miyamae Hilton Amsel
[email protected] [email protected] [email protected]

Endnotes

51
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 Further insights

Executive summary
Digital Disruption Index Human Capital Trends 2017 Tech Trends 2018
Organisations face major disruption This report highlights the importance Our annual Technology Trends
to their markets, customers and top executives place on adapting report on Deloitte Insights analyses
Market outlook
workforce. Deloitte has developed their organisation’s design to the trends that could disrupt
the Digital Disruption Index to help compete in today’s challenging businesses in the next 18-24
remove the hype around technology business environment and highly months. CIOs who can harness the
Value and collaboration
investment and also help senior competitive talent market. Deloitte possibilities of these technologies
executives uncover digital skills gaps. has been conducting and compiling will be better positioned to shape the
Talent and leadership Over time the findings will create global research into human capital future of their business.
a detailed picture of the impact of trends since 2012—a body of work
digital across the largest and most that represents some of the longest-
Digital procurement influential UK companies and public running and most comprehensive
sector bodies. study of HR, talent, and related
technology topics ever conducted.
Action starts here

Industry and regional overviews

CFO Survey, Q4 2017 European CFO Survey Global Shared

About the participants The quarterly CFO Survey is firmly The European CFO Survey is part Services Report
established with media and policy of a global cohort of surveys Since 1999, Deloitte
makers as the authoritative barometer benchmarking the current and has been conducting
Acknowledgements of UK corporates’ sentiment and future intentions and opinions of biennial surveys to
strategies. It is the only survey of major European Chief Financial Officers. understand how shared
corporate users of capital that gauges The findings discussed in this report services organisations
Regional and country contacts attitudes to valuations, risks and are representative of the options are capitalising on leading
financing. of almost 1,550 CFOs based in 19 practices and trends to
European countries. CFOs were address their business
Further insights all contacted between August and challenges and better
September 2017. meet their customers’
needs.
Endnotes

52 52
Leadership: Driving innovation and delivering impact
impact | The Deloitte Global Chief Procurement Officer
Officer Survey 2018

Introduction

Executive summary
The Future of Procurement in the Third Party Governance Global Cost Survey Report
Age of Digital Supply Networks and Risk Management Deloitte engaged Research Now to
Over the past two decades, the This global survey conduct a series of regional cost
Market outlook
main mission of procurement has on extended risk management surveys in order to
broadened from cost leadership management looks at better understand executives’
Value and collaboration and assurance of supply to strategic how global organisations perspectives on current and future
insights for decision making. are addressing the cost reduction initiatives within large
Disruptive technologies, mobile challenges they face in companies and multinationals.
Talent and leadership computing and the cloud, constant managing third party The surveys covered four major
connectivity, and sensors that risk. The survey, based regions – United States, South
enable devices and machines to on over 500 responses, America, EMEA and Asia Pacific.
Digital procurement form the internet of things are now reflects the views of
paving the way for new applications senior leaders from a
and capabilities across the supply variety of organisations
Action starts here chain that will enable procurement in 11 countries across the
to offer even more strategic value. Americas, EMEA and
Asia Pacific.
Industry and regional overviews

Achieving Digital Maturity Global Economic Outlook 2017 Global Report –

About the participants Our third annual study of global A quarterly publication that offers Transforming Talent
digital business, a collaboration insights from Deloitte economists Find out how crowdsourcing,
with MIT Sloan Management around the world on trends and robotics and a diversified
Acknowledgements Review, reveals five key practices events shaping the marketplace. workforce is transforming
organizations best able to achieve Each issue features region-by-region talent resourcing and
digital maturity employ—and the economic outlooks. acquisition models in
Regional and country contacts lessons all companies can learn Deloitte’s latest Global
from their success. report.

Further insights

Endnotes

53
impact| The Deloitte Global Chief Procurement Offi
Leadership: Driving innovation and delivering impact | The Deloitte Global Chief Procurement Officer Survey 2018Leadership: Driving innovation and delivering impact Officer
cer Survey 2018

Introduction Endnotes
Executive summary 1. Deloitte European CFO Survey, 2017 Q4

2. The Future of Procurement in the Age of Digital Supply Networks, 2017

Market outlook 3. Deloitte Joint Strategic Planning (JSP) 2018 white paper

4. MITSloan in collaboration with Deloitte University Press: Achieving Digital Maturity, July 2017

5. Understanding Talent, Technology and Transformation: Digital Disruption Index, November 2017
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

54 54
This publication has been written in general terms and we recommend that you obtain professional advice before acting or refraining from action on any of the contents of this publication.
Deloitte LLP accepts no liability for any loss occasioned to any person acting or refraining from action as a result of any material in this publication.

Deloitte LLP is a limited liability partnership registered in England and Wales with registered number OC303675 and its registered office at 2 New Street Square, London EC4A 3BZ,
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