Although it has a different title, this article is really the next in the multi-part series on Supply Management: Big Trends & Predictions for 2013 where we have made predictions about Big Data, Globalization, and Technology. Today, we identify the hot button issues that will keep Chief Procurement Officers on their toes in 2013.

Hot Button Issue #1 – Staffing Size & Talent

Ardent Partners’ recent CPO Rising: Keeping Score report (stay tuned, coverage begins here next week) identified “Staff and General Talent Constraints” as the largest issue for all Chief Procurement Officers this year. This is true for all CPOs, including those atop Best-in-Class organizations. CPOs feel that their staffs are too small and that the talent gap is too wide for the work that they must do and for the plans that they have. The result is often an overburdened procurement staff; but, perhaps even worse, the result is often a procurement department that does not strive to do more since the attempt would expose the existing departmental weaknesses to outsiders in the larger enterprise.

The truth is that most business functions are (or at least feel that they are) under-staffed . The reality is that this will not change in 2013 (or maybe ever). Companies still seem hesitant to add headcount and new job requisitions for procurement departments are few and far between. Things may ease as we go forward, but the old “doing more with less” mantra will remain firmly entreched.

On the “talent side,” I strongly believe that the migration of talent from the CPO role to other C-Level roles will only serve to draw more talented people to procurement in the first place. yes, the procurement profession will continue to rise in its appeal to talented workers, but this will take place gradually and over a generation. In the short-term, CPOs must take more deliberate steps to improve the department’s capabilities – taking full ownership of staff recruiting/hiring would be a great first step; taking a 365-day programmatic approach to improving every staffer’s skills would be another. It is difficult to pull already limited resources away from the job at hand and allow time for training, but it is an investment that must be made.

CPOs must address their teams’ greatest weaknesses – lack of talent & lack of resources – in a head on way in 2013 or else, they will struggle to advance. If not now, when?

Hot Button Issue #2 – Procurement Performance Measurement

Quick Quiz Q1: How did your procurement department perform in 2012?

Quick Quiz Q2:Who measured the procurement department’s performance and what did they measure?

QQ Q3: Who defined the performance metrics and the specific goals of each?

QQ Q4: How well do the current  performance metrics define the overall value delivered by procurement in 2012?

QQ Q5: How well do the current performance metrics map to overall enterprise goals and objectives?

Measuring the performance of a procurement department can be a very complex process but, in 2013, more CPOs will work aggressively and proactively to change the answers to the above questions and define the performance criteria (and the methodology used to track it) that will be used measure procurement department performance.

Hot Button Issue #3 – Outsourcing

One reason why enterprises have been, and will continue to be, hesitant to invest in new staff positions has been growing awareness and acceptance of outsourcing by corporate executives. In 2013, I expect that the procurement outsourcing market will to continue to grow at a pace that exceeds other supply management “services.” This means that the pressure on CPOs to regularly rationalize their headcount and overall budget will continue in 2013. Whether they want to or not, more and more CPOs will have to look long and hard at outsourcing.

Tagged in: Chief Procurement Officer, CPO, Lists, Outsourcing, People, Performance, Predictions