Almost two-thirds of CPOs do not believe their teams have the skills and capabilities to deliver their procurement strategy, according to a survey.
The Deloitte Global CPO Survey 2016 found just under half of procurement chiefs reported difficulty in attracting talent and one-third said their training budgets were now less than 1% of total spending budgets. Deloitte said this was a quarter of what might be considered best practice.
In 2013 the study found less than half of CPOs reported a lack of skills in their teams.
James Gregson, EMEA head of sourcing and procurement at Deloitte, said: “We’re seeing training budgets being cut and a push towards outsourcing as a way to plug the skills gap. This trend is most prevalent in the largest organisations, where 40% are expected to pursue outsourcing for some element of their function.”
The survey, involving 324 responses from 33 countries, also found 45% of CPOs reported a rise in procurement related risk, such as volatility in emerging markets and geopolitical uncertainty affecting supply chains.
More than half reported an increase in external financial and economic uncertainty, and of all industries surveyed, consumer goods firms were the most concerned.
“Risk and the widening skills gap are clearly a concern for CPOs,” said Gregson. “Weakness in global economic metrics and heightened levels of geopolitical uncertainty are two of the major themes for CPOs this year.”
Meanwhile, 60% of CPOs admitted they do not have a clear digital strategy, though 70% are investing in self-service solutions and spending on mobile, cloud and social media is also increasing.
Gregson said: “The key will be to get this strategy in place first, so the right technology is being used in the right way. Done correctly, a digital strategy can improve accuracy, speed and outcomes.
"This is potentially a double edged sword – digital can either reinvigorate or replace procurement’s role. It’s up to the CPO to set the strategy and lead the change, or risk being left behind.”
CPOs are primarily focusing on consolidating spend, increasing supplier collaboration and restructuring existing supplier relationships to deliver value over the coming year, the survey found.