The role of chief procurement officer (CPO) continues to face intense complexity as leaders navigate unprecedented levels of supply chain disruption coupled with procurement’s increasing value proposition at the heart of the enterprise, according to a new report from Deloitte Consulting LLP.

The volatility is seen as an opportunity, and high-achieving CPOs are using it to invest in talent, transform their operating models and accelerate their digital transformation efforts.

The survey found top-performing CPOs are leveraging digital advancements and outsourced talent models to remove themselves from tactical, transactional and operational work to focus more on strategic activities like business engagement or supplier collaboration.

According to the Deloitte Global Chief Procurement Officer (CPO) Survey, following the unprecedented levels of supply chain disruption due to the COVID-19 pandemic, there has been a growing need for procurement to enable growth, mitigate inflation and drive significant levels of value.

This year’s study revealed that procurement is engaging across a broader set of priorities than ever before, with environmental, social and governance (ESG), and corporate social responsibility (CSR) becoming increasingly important.

Enhancing ESG and CSR jumped to the No. 2 priority spot (72 percent), up from No. 7 in the last report.

Driving operational efficiency (74 percent) remained the No. 1 priority. Digital transformation (72 percent) tied for priority No. 2 (up from its previous No. 3 spot), while improving margins via cost reduction (71 percent) came in at No. 3 (down from No. 2 in 2021).

“Following the COVID-19 pandemic’s unprecedented supply chain disruptions and the rising expectations for procurement to enable growth, CPOs are currently being challenged to do more, and better, with less. As we navigate this pivotal moment for the industry, investment and development of talent and operating models will likely differentiate the CPOs who win from everyone else,” said Ryan Flynn, principal, Deloitte Consulting LLP.

“To help transform value chains, enhance third-party management and maximize enterprise value beyond basic supplier cost reduction and risk mitigation, the CPO must take a leadership role in collaboratively building an enterprise capability of “orchestration,” the report stated.

The 2023 survey found that when comparing orchestration capability against value delivered, the top quartile of CPOs have a 25 percent performance advantage over their peers.

The top-quartile respondents were designated as Orchestrators of Value versus their peers, who were classified as Followers.

The Deloitte study found that Orchestrators of Value focus on three main areas:

• Operating model design — Procurement has seen a continued trend toward increased centralization of key capabilities. CPOs can optimize operational models by standardizing processes and policies, creating purposeful teams and using outside intelligence to inform their highest priority opportunities.
  Talent strategy — By sourcing capabilities more widely and investing in sophisticated talent development strategies, CPOs can not only close capability gaps but also optimize for demand fluctuations, quality and cost.
  Digitization maturity — To achieve successful digital transformation, CPOs must accurately define the value proposition that technology is intended to solve for and the capacity for the broader procurement team to engage digitization programs in meaningful ways.

CPOs are focused on suppliers to deliver value amid an uncertain and complex global business environment, the survey found.

Both supplier collaboration (No. 1) and supplier renegotiation (No. 4) require strong category management, good data transparency and trust, the report noted.

“These strategies benefit greatly from advanced analytics and are enabled, in part, by the No. 2 strategy of digital transformation,” the report added. “By helping to shape the specifications, volume commitments and timing of purchases, CPOs can play an active role in proactively managing the procurement industry’s current inflection point.”

“The enablement of digital capabilities to aid decision-making and execution is allowing CPOs to build agile and digitally enabled procurement operations,” said Jennifer Brown, principal and supply chain procurement offering leader, Deloitte Consulting LLP. “Coupled with developments in AI and the speed at which it’s advancing means that procurement is in a state of constant change. From basic process streamlining to driverless organization enablement, AI is poised to help us make better, more data-driven decisions — and smart CPOs are paying close attention.”