CPOs suffer from low profile

6 December 2006
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06 December 2006 | Paul Snell

Fewer than 20 per cent of chief procurement officers (CPOs) report directly to the president or CEO of their company, a survey has found

According to The CPO's Strategic Agenda, published by Aberdeen Group this week, procurement "has yet to arrive at the same level as functions, like sales," despite becoming more strategic in the past three years. The largest single group of CPOs, 35 per cent, report to their company's chief financial officer. Among the best performing companies, however, just under a third report to their president or CEO.

These CPOs also see improving the skills of their teams and supplier collaboration as top priorities. Yet CPOs in poorer performing companies think that increasing the amount of spend they control and improving the automation of purchasing processes are more important.

Three-quarters of all CPOs believe that negotiating cost savings for their business is still the best evidence for the usefulness of procurement.

The report recommends that poorer performing companies adopt performance targets for their teams and provide increased training for procurement staff. The best performing departments are also encouraged to increase training. They are urged to adopt a "sales" methodology for their team, with rewards for staff that reach targets. The report also urges CPOs to become involved in 100 per cent of their company's spending.


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