The CPO Study 2021 from ProcureCon and WBR Insights provides a plethora of data and an insight into the challenges Procurement leaders and teams have had to face over the course of the pandemic.
Based on the responses of various procurement leaders, the study unveils how these leaders have learned and confronted these difficulties, with recommendations on how they intend to adapt procurement to focus on risk management, quality assurance, innovation and strategic development, which all ultimately have an impact on the rest of an organization and its strategic success.
What has changed with procurement leadership?
Procurement leaders have acknowledged that procurement is changing, with the challenges of COVID-19 speeding the process up a whole lot more.
As supply chains become longer, more integrated and complex, procurement leaders need to increase pressure testing and strengthen their disaster recovery planning. The study revealed how procurement leaders report to different departments, which can vary depending on its impact: for example, if procurement has a significant impact on the bottom line, they may be more likely to report to Finance, whereas if its primary function is supplier innovation and risk management, then procurement will report to Supply Chain.
Currently, procurement reports to:
- Supply Chain 60%
- Operations 20%
- C-Suite 20%, compared to just 6% pre-COVID
Procurement adjusting its technology
Procurement continues to experience more pressure than ever to improve sourcing speed as more companies and users move online, inevitably bringing more risk. 77% of respondents say there is at least some linkage between COVID-19 and their organizations’ total sourcing cycle times, which addresses the issue of procurement leaders needing to invest more of their budgets in future automation, where they currently invest approximately 50% of their budgets.
Strategic sourcing and supplier relationship management procurement solutions remain relevant and the largest priority, but this also raises the possibility of sourcing locally and using digitization to balance sourcing speed with risk management.
A common theme arises within the survey: CPOs intend to continue to invest in digital procurement, with a focus on AI/ML, P2P and Vendor Management Systems over the next 12 months. Other areas continue to evolve, 40% of CPOs have RPA in place at their organization compared and an additional 23% will implement over the next 12 months. Blockchain adoption is surprisingly high at 33% which may be represented more by specific use cases or pilots rather than extensive adoption.
As a result of 2020 learnings, some procurement teams will need to shift their strategy and technology investment to balance sourcing speed, risk management and control.
Read the full CPO 2021 Study here.