State of the Procurement Profession Part 3: CPOs under representation among C-SUITE organizational leaders is a global issue.

CIPS 6 November 2012

State of the Procurement Profession Part 3: CPOs under representation among C-SUITE organizational leaders is a global issue.   

After almost 25 years on CEOs, Government Ministers, Policy Makers continue to underestimate the strategic importance of procurement. Today;

1. There are no CPOs directly reporting to CEOs and on the executive committees on the major global construction companies in the world. They include: Balfour Beatty U.K CSCECC  CHINA,  Bechtel U.S. Hochtief  GERMANY, ACS  SPAIN,  Taylor Wimpey-UK  Skanska SWEDEN, Leighton  AUSTRALIA, Kajima  JAPAN, Vinci   FRANCE, Odebrecht   BRAZIL, Larsen & Tourbro  INDIA, CCC   MIDDLE-EAST, PCL  CANADA, Enka  TURKEY, Orascom EGYPT

2. There are no CPOs directly on the executive management committee of the World Bank, IMF, IFC, Asian Development Bank SSNIT(Ghana) PIC(South Africa) etc.

3. There is still no Minister for Procurement in any of the UN affiliated countries.

4. The combined annual procurement expenditure for the UK’ NHS is one of the biggest in the world.   Yet the  NHS Trust Development Authority (the overseeing body) does not have a CPO reporting directly to David Flory, the Chief Executive.

5. There are no CPOs directly reporting to the CEO and on the executive committees of the top chemical companies in the world. Notable names include Shell, BP or ExxonMobil.  For example within the Shell Chemical Group procurement falls under Malthias Bischel who is responsible for Projects and Technology

6. There are no CPOs reporting to the CEO plus on the executive committee of MTN, Colt Vodacom, Vodafone, CELLC and Telkom SA AT&T Airtel. This is in spite of their hundreds of combined billions of rands procurement related annual spending on services and capital expenditure.

7. There is no CPO directly reporting to Donald Kaberuka the President of the African Development Bank, or to Mr P Dlamini CEO of the Development Bank of Southern Africa or to Mr Qhena, CEO of the Industrial Development Corporation. Yet all these organizations regularly pontificate about the need to use procurement as a strategic tool for economic development.

8. Over 90% of CFOs and other executives representing the procurer on the Executive committee of the random companies on the various stock exchanges were not professional members of a recognized procurement professional body. In effect procurement was actually been represented by another professional that had not signed a procurement professional code of ethics and conduct.

9. Despite the increasing evidence of potential conflict of interest, all known public procurement authorities in Africa report into Finance and Treasury. Examples include South Africa, and Ghana.

10. In most African countries percentage of Government expenditure towards procurement is above 50% and increasing. Yet as at END 2 QTR-2012 there is Still no procurement professional reporting directly to any African President. Nor is there a cabinet level CPO to monitor procurement.

11. There are no CPOs reporting to the CEO plus on the executive committees of ABSA, Standard Bank, Standard Chartered, Sanlam, Old Mutual Alexander Forbes, and Ecobank. This is in spite of the hundreds of millions of dollar spent on tangible and intangible services and products.

12. There is 100% executive and director level representation for finance on all publicly quoted companies on all stock exchanges in the world.

13. There are no CPOs on the executive committees and reporting directly to the CEO within the leading top consulting companies in the world.  Notable names Atos-origin, Monitor, Mckinsey Accenture, Booz and Co, IBM Global solutions, Roland Berger, AT Kearney, Oliver Wyman.

14. There are no CPOs reporting directly to the CEO plus on the executive committee of the largest cement companies in Africa. Examples include lefarge,  PPC, Afrisam and Dangote.

15. The top 5 construction companies  in South Africa i.e. Grinaker, WBHO, Basil Reed Group5 and Murray and Roberts do not have a CPO on their Executive committees and reporting directly to the CEO.

16. There is less than 5% CPOs directly reporting to CEOs plus on the executive committee of the top 25 companies listed on the Nigerian, Ghanaian, South African, and Kenyan stock exchanges.

The evidence clearly provides some food for thought

a) CEO and C-SUITE members are still not sure about the capabilities and value add from the Chief procurement officer. 

b) As a practicing collective we need to assess whether or not
I. the title of the Chief Procurement Officer has been permanently damaged by its inconsistent use by relatively lower-ranking and inexperienced procurement practitioners.
II. The use of the CPO title is harming the EXCO aspirations of  qualified and value adding procurers
III. The Chief supply chain officer title is more appropriate for an EXCO qualified procurement professional

c) A  clear definition of what a CPO is, beyond a person who happens to work in procurement, must be established. This definition may have variants between countries, in which case the nuances between African, European, Asian, American, South American and other CPOs must be understood. A person who works in procurement may need to become an executive for that role before they can be named a CPO.

d) The current content of educational and training materials may need to be revisited and revised to help further equip practicing procurers with EXCO level skills and professionalism.

e) There is universal agreement on the EXCO role of a chief operating officer, a chief financial officer, chief information officer, chief technology officer, chief commercial officer, chief marketing officer, chief strategy officer and, increasingly, chief supply chain officer.

Dr Boateng is a Fellow of CIPS, Fellow of IOD UK and Southern Africa and current chairman of the CIPS Africa Board. He is also a Fellow of the Chartered Management Institute, Chartered Institute of Logistics and Transport and President of the Institute of Operations Management Africa and CEO of the PanAvest partnership, a vertical specific human capital development organization

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