Ardent Partners recently published our annual CPO Rising report (entitled CPO Rising 2014: Convergence) and of all the reports we publish this year, the focus of this report is exactly geared towards our regular readers (CPOs and those who aspire to the role). The report presents a comprehensive, industry-wide view into what is happening in the world of procurement and captures the experience, performance, perspective, and intentions of 273 Chief Procurement Officers and other procurement executives. As we do every year, we interview many Chief Procurement Officers (24 procurement leaders in total) to add context to this research effort. The report is available (with registration) from several sponsor sites including here, here, here, here, here, or here.

Chief Procurement Officers’ Top Challenges in 2014

The biggest challenge for Chief Procurement Officers in 2014 is staff or talent. As shown in the figure below, 57% of CPOs believe that flat headcount, stagnant skills capabilities, and / or greater staff responsibility represent their greatest challenge in 2014 and beyond. Procurement’s convergence within the enterprise and the persistent need to do deliver more value compound these challenges.

The CPO’s Top Challenges in 2014

Although economic conditions have improved over the last few years, many enterprises still consider it a risky endeavor for companies to hire full-time staff. As a result, most procurement teams have not been able to increase their bench strength significantly or at all, nor are they expected to be able to do so in the immediate future, leaving them with flat or relatively flat headcounts.

Despite procurement’s stagnant staff levels over the past few years, its mission has converged with other, traditionally siloed parts of the enterprise – notably finance, human resources, and legal – and frequently resulted in greater responsibility. While this is a strategic win for procurement, allowing it to exert greater influence throughout an organization and align it with its overall mission to drive greater value for the enterprise, it presents a tactical challenge for procurement: greater responsibility. Greater responsibility with fewer procurement staffers means that procurement teams have had and will need to continue to “do better with same“.

Surely, business process improvements and greater technology solution adoption have allowed procurement teams to keep their heads above water in the new economy, where doing more with “same” or even less is the new normal. But, as we’ve shown in our recent “Skills for the Modern Procurement Pro” series, many procurement staffs are just average and frequently below average when it comes to critical skill areas like contract management or leveraging technology to drive business value. The result is that Chief Procurement Officers and their teams are limited not only by flat headcount but also by their stagnant skill sets. With companies still reluctant to significantly increase the size of procurement teams, CPOs are best served by investing in the staff they currently have and enabling them to do better with same. We’re already seeing this play out in the CPOs’ strategies for 2014, as 45% and 32% of CPOs want to get more out of the technology solutions and business processes they currently have, respectively. After all, adopting efficient business processes or robust technology solutions have limited impact if the staff doesn’t know how to implement or leverage them. So, instead of battling for big ticket budget item approvals, many CPOs have focused on investing in training programs and ensuring that their staff are fluent with existing technology solutions and business processes – optimizing what’s already in place. These measures should help CPOs and their procurement teams overcome the challenge of delivering greater value to the enterprise with flat bench strength and stagnant skills.

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Chief Procurement Officers in 2014: Doing Better with Same

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Skills for the Modern Procurement Pro: Summary (Part II)

CPO Rising 2014: Convergence…. The CPO’s Three Year Plan

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