Are EMEA Procurement Leaders (Still) Lacking Support?
Based on findings from recent surveys we have to ask... Are some EMEA procurement professionals not feeling as supported, as they would like to be, by executives within their own companies? Is so, we empathise with them, procurement is at a critical juncture in time – the rise and prevalence of digital solutions and the pressure to deliver savings in an uncertain macroeconomic climate means they need support more than ever.
Despite the findings that we detail further below, we’d like to shine a ray of light on the “lack of support” issue. Procurement professionals rightly want to digitise “more” but in order to get the buy-in and support they need, they will have to demonstrate proof, or at least feel certain in themselves, that the projects they choose are going to deliver great results and encourage further buy-in for more projects in the future.
So, we would like to draw attention to an opportunity. Pick some low hanging fruit e.g. a significant project (saving time and money on indirect IT device purchasing with an experienced partner) that is relatively quick and easy to implement with clear demonstrable gains. Get buy-in for that and show the results to their key execs. Showing evidence of a clear win that can deliver value on an ongoing basis will gain executive respect and that should logically lead to more support for additional digital procurement projects. In other words, pick an easy target, deliver and then move on.
In a previous article Inch by Inch, the CPO Transforms - Digitally we reported on the global trends and issue affecting innovation and delivering impact in procurement and how it relates to IT purchasing based on our interpretation of the findings from The Deloitte Global CPO Survey 2019.
Let’s for a moment look further back to Deloitte’s survey from 2018, especially at some of the regional differences in North America, EMEA and APAC –the markets where our 8,000+ clients mostly operate- and look for any key issues and how they might have changed.
Some of the (2018) findings are worth drawing attention to:
EMEA procurement leaders saw a significant drop in support from executives (from 40% in 2017 down to 25% in 2018) and only 21% believe they are rated as highly effective/highly valued. This could explain why only 31% believed their digital procurement strategy helps deliver on its objectives.
These stats raise questions:
What are the figures for this year (2019)? Have they improved or is the “decline” continuing?
Unfortunately the 2019 survey (Complexity: Overcoming obstacles and seizing opportunities- Industry and regional view) didn’t ask the same questions so we can’t know for sure, but it does rather worryingly state that 79% are NOT CONFIDENT that the procurement professionals in their organisation have sufficient capabilities to maximise their use of digital technologies.
Why is/was executive support declining? And why so much pessimism about their digital strategies?
There are no easy answers but as we have pointed out before, CPOs who want to lead their companies on an ambitious, disruptive and profitable journey would be wise to start in areas where gains are easily demonstrated and to collaborate with an experienced partner. This would raise confidence and increase executive buy-in. The whole question of executive support is perhaps the most challenging of all and we have also suggested that the Corporate Immune System or “status quo” is impeding digital evolution of the procurement function.
The APAC findings from 2018 raise eyebrows too.
Whilst 33% of APAC procurement leaders do feel effective & valued and do have considerable executive support (40% and rising) Only 19% believe their digital strategy helps deliver on its objectives and improve enterprise value and a massive 32% have no digital strategy in place at all.
Does this signal over confidence among APAC leaders or is strategy execution the real issue?
Only time will tell as the 2019 survey doesn’t provide updated figures but as with EMEA, the percentage of procurement professional who are not confident in their organisations capabilities is extremely high and must be of considerable concern – in APAC’s case it’s 90%.
Some more key findings from The Deloitte Global CPO Survey 2018.
EMEA PROCUREMENT LEADER OPINIONS
56% say savings performance has increased
76% say “reducing costs” are their top priority
Only 21% believe that their procurement function is highly effective and highly regarded internally
Only 25% feel their executives are “very supportive”, compared to 40% in 2017
31% believe their digital strategy helps deliver on its objectives and improve enterprise value.
54% see analytics as the most impactful technology
APAC PROCUREMENT LEADER OPINIONS
68% say savings performance has increased
78% say “reducing costs” are their top priority
33% believe that their procurement function is highly effective and highly regarded internally
40% feel their executives are “very supportive”
Only 19% believe their digital strategy helps deliver on its objectives and improve enterprise value and a massive 32% have no digital strategy in place.
54% see analytics as the most impactful technology
Quality of data, and not the lack of data integration, is seen as the biggest barrier to implementing digital technologies in this region.
NORTH AMERICAN PROCUREMENT LEADER OPINIONS
71% say savings performance has increased
81% say “reducing costs” are their top priority
30% believe that their procurement function is highly effective and highly regarded internally
44% believe their digital strategy helps deliver on its objectives and improve enterprise value however 14% have no approved digital strategy in place
70% see analytics as the most impactful technology
It’s also worth noting a global common trend, that payment and requisition/ordering processes have seen the highest rate of digital technology adoption across all regions.