Supply Chain Council of European Union |

Digital change is a top priority for procurement directors

Supply chains that are becoming increasingly transparent and interconnected with customers, distributors, vendors and others are providing a brave new world of work for chief procurement officers, a new study finds.

To cope and bring more efficient and cost-effective procurement to the companies to the companies they work for, chief procurement officers are counting more on new digital technology, says a new survey from Deloitte Development.

Only 54% of chief procurement officers are satisfied with the results that new digital applications.


Lee Barter, partner, strategy and operations consulting, Deloitte Canada

The survey of 481 procurement directors finds that aligning procurement procedures and programs with a company’s business strategy is a priority for 58% of procurement managers.

The key to that alignment is the rollout of more forms of digital technology. For example, 68% of chief procurement officers see their biggest digital priority as moving more procurement applications off of legacy systems and replacing them with cloud computing.

Next up is extending new digital procurement tools to internal departments and outside suppliers, at 59%; supporting internal digital technology projects, 43%; internet of things (IoT) projects, 41%; supporting supply chain management with more digital tools and services, 26%; and customer integration, 21%.

Most CPOs want source-to-pay applications

“Two-thirds of chief procurement officers are getting their house in order by implementing modern source-to-pay applications that automate core workflows, which, done right, free them up to focus on even more strategic initiatives,” says Lee Barter, partner, strategy and operations consulting, Deloitte Canada.

But bringing new digital applications to procurement is hard work—and the results aren’t always a total success, the survey finds. For example, 81% and 71%, respectively, of procurement directors are satisfied with the results for digitally enhanced supply chain risk and compliance and supplier management.

But only 54% of chief procurement officers are satisfied with the results that new digital applications put in place to better automate spend- and supply-analysis and planning. Only 53% of procurement directors are content with the results of the digitally enhanced requisition and ordering systems they put in place. “A large percentage of companies that have fully implemented these modern technologies are not actually satisfied with the results,” the survey says. “In fact, shown in a different way, the results are sobering, especially for some of the more complex and strategic technology areas.”

Better access to information through the introduction of advanced analytics is the most desired investment in new digital technologies by 59% of chief procurement officers, followed by renewal of strategic procurement tools (37%), renewal of operational procurement tools (37%), new enterprise resource planning technology (35%), robotics process automation (25%) and cloud computing, 24%.

“CPOs are at various stages of the digital maturity curve in their understanding and implementation of the digital procurement transformation,” according to the survey.

Other survey findings include:

  • 36% of chief procurement officers say consolidating spending is their biggest organizational priority over the next 12 months, followed by increased competition (28%), supplier collaboration (28%) and business partnering (27%).
  • For 70% of chief procurement officers, reducing costs is the overall top priority. Next in line is managing risk (55%), introducing new products/services or expanding into new markets (50%) and managing corporate social responsibility (47%).

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