This article was originally published on May 4th, 2016 in The Legal Edge

Entitled “Procurement: at a digital tipping point?”, Deloitte has now released its Fifth Global CPO Survey. The findings draw from a wide survey population including 334 responses from senior procurement executives across 33 different countries, with combined revenues of approximately 4.4 trillion annually.

Cost reduction continues to be a top priority (74%) for CPOs, followed by new product/market development (46%), increasing cash flow (45%) and organic expansion (43%).

From a strategic perspective, top priorities over the next 12 months are consolidating spend, increasing the level of supplier collaboration and restructuring existing supplier relationships. Nearly half of respondents are investing in cloud based computing to support procurement activities, and it is expected that disruptive digital technologies will play a greater role creating increased efficiencies for supply chain and procurement in the years to come.

An alarming 62% of CPOs do not believe their team has the skills and capabilities to deliver their procurement strategy, compared with 48 % two years ago. By contrast, the investment in talent development has dropped in priority with more than 29.5% of respondents reporting they spend less than 1% on training budgets, compared with 3.2% in that category in 2012. With the widening talent gap it seems surprising that upskilling existing employees and attraction and retention of new recruits is not being given a higher priority. Increasing internal capacity of existing procurement professionals will surely enable greater progress towards the stated goals and priorities over the coming years.

In the words of Lucy Harding, Partner and Global Head of Practice, Procurement and Supply Chain, Odgers Berndtson:

“Collectively, steps need to be taken now to attract, train and retain the next generation of leader for which the benefits will only come through in the medium term. It will be very disappointing if the results of the 2016 survey continue to show the gap widening and a similar low level of investment in training”.

To view the full report, click here.

Readers are cautioned not to rely upon this article as legal advice nor as an exhaustive discussion of the topic or case.  For any particular legal problem, seek advice directly from your lawyer or in-house counsel.  All dates, contact information and website addresses were current at the time of original publication.