Procurement Intelligence Unit

This week, the PIU launched its first-ever annual procurement strategy report, entitled 'Procurement CPO 2010 – Playing the Full Role'. Among other trends, the study identifies the major challenges and priorities that CPOs and their teams are facing this year, the key success factors they believe are critical in overcoming them and the ways in which performance is measured.

As the lead analyst on this executive research, the plethora of responses we received, predominantly from large organisations, provided the perfect opportunity to dive deeper into the data via means of statistical analysis and one of its well-known tools, SPSS. A closer look at the agenda items, for example, revealed that aside from 'cost reduction' being an obvious priority for 2010, 'category strategy development' and 'risk management' also topped the list, while 'procurement outsourcing' and 'green procurement' were considered least important.

The low priority given to the latter might come as a surprise given the commercial value of green procurement that companies are increasingly realising. In fact, Dutch consumer electronics company Philips recently reported that 31% of sales were derived from green initiatives. Equally, our respondents' views on outsourcing, unsurprising perhaps, stand in contrast to what the outsourcing industry itself believes to be true. India's outsourcing body Nasscom predicted that revenue from exports of IT and BPO outsourcing will grow to £36 billion in the year to March 2011.

Our analysis was taken to a whole new level when we started examining the characteristics that set procurement leaders apart from less successful peers. We found, for instance, that successful procurement departments are embracing a more strategic focus without, however, underestimating their operational duties, such as payment terms and delivery accuracy.

In future research, our agenda items, key success factors and KPIs are likely to change, and it will be of much interest for the PIU and procurement executives alike to take note of the direction. Will procurement executives still talk eagerly about earning the trust of their peers next year? Is low-cost country sourcing poised to see a come-back to the CPO agenda as companies recover from the recession? In the meantime, stay tuned for future blogs that discuss CPO Strategy 2010. And, as always, we look forward to your feedback.