Supply Excellence — CPOs on the Rise

CPOs on the Rise

March 6th, 2008 · by Tim Minahan · No Comments · LCCS and trade, best practices, supply management

Three years after its inaugural look at Chief Procurement Officers’ key transformation strategies and the challenges to implementing them, Aberdeen Group’s latest CPO Agenda study finds more of the same. Cost-cutting continues to rank among top goals, due in large part to the ailing economy. And procurement execs say their groups struggle most with misaligned processes and systems, recruiting and retaining skilled talent, and an ongoing lack of executive support.

The good news is that the report, CPO Rising: The CPO’s Agenda for 2008, shows clear evidence that many procurement organizations are making progress on the key initiatives they mapped out for themselves years ago. According to the study, leading procurement groups now play a key role in managing company spend and are increasingly contributing to corporate strategy in areas such as innovation, global expansion, risk management, and sustainability.

Specifically, Aberdeen’s survey of more than 350 enterprises around the globe found that Best-in-Class procurement organizations have more than 70% of total spend under management versus 40% or less for other organizations.

How’d they do it? Compared to other study respondents, Aberdeen reports that top performers were:

50% more likely to have adopted a center-led or matrixed procurement structure
50% more likely than the rest of the sample to have embarked on an aggressive low-cost-country sourcing (LCCS) strategy
63% more likely to have mapped out multi-year strategic plans
60% more likely to hire and develop commodity experts
70% more likely to have invested in specialized training for their teams
Most aggressive adopters of procurement automation, particularly e-procurement, e-sourcing, and spend analysis tools

Supply Excellence will revisit some of the key findings and strategies from this pinnacle CPO Agenda study. In the interim, readers can download a complimentary copy of the full report here.

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