The procurement talent gap, technological frustrations and suppliers who are insufficiently focused on risk are among the challenges facing CPOs in 2017, according to a survey.
Consero’s 2017 Procurement and Strategic Sourcing Report found US procurement executives identified cost control as the top priority in 2017, with 76% naming it as a main focus area for the year.
Some 39% named supplier management as the main focus area for the year while 37% cited talent development and retention.
Cyber security and third-party contracts top the list of risk areas procurement executives will need to monitor closely this year, with around half of respondents identifying these as top areas of risk the 2017, followed by regulatory compliance.
Almost nine in 10 said they used early engagement strategies to generate leadership support for procurement, while 65% analyse stakeholder needs for the same purpose.
The report urged CPOs to invest in the right technology and develop talent in order to tackle possible challenges.
Almost six in 10 reported an increase in staffing over the past year, 19% said staff had decreased while a quarter reported no change.
In response to questions about the budget for talent development, 46% said the budget had not changed and 12% said it had decreased.
Respondents whose budgets did not increase should identify the analytics that drive value in their operations and invest time and money in these areas, the report said.
Half of respondents did not consider there to be a sufficient pool of talent available to support hiring needs. Some 44% considered relationship management among their staff to be lacking, while 39% thought there was a need for more leadership skills among staff.
Two thirds had increased their use of metrics to rate the performance of the procurement department but 82% were dissatisfied with the level of insight extracted from company data.
“There is obviously room for senior procurement executives to make better use of the data that they collect and measure,” said the report.
It added that procurement executives were equally frustrated with their technology infrastructure, with 88% reporting that their tech infrastructure does not meet the needs of their operation.
Just over half of respondents plan to invest in spend analytics to help address this issue, 46% plan to invest in e-procurement tools and a quarter will spend on electronic data interfaces.
Meanwhile, an equal percentage (39%) of respondents increased their numbers of suppliers as decreased them in 2016.
Only 15% of respondents plan to outsource more of their procurement operations in 2017 while 85% plan on keeping existing processes in-house. And 86% of senior procurement officers believe vendors are insufficiently focused on minimising risk.
A quarter of respondents measure the effectiveness of supplier relationships using a performance dashboard and 38% plan to introduce such tools in the coming year.
“With the right tools, procurement executives will be in a better position to manage and improve supplier relationships and associated risks,” added the report.
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