Challenges and Metrics Behind the Role of Chief Procurement Officer

The research examines the backgrounds, challenges and career paths of CPOs, and how they see their roles in helping their organizations achieve high performance.

Research by Accenture has confirmed the important role that procurement excellence plays in helping an organization achieve high performance. In today’s troubled global economy, the CPO has a vital role to play in equipping the procurement function to play its part.

In May 2009, Accenture asked senior executives ultimately responsible for procurement strategy and execution to share their views on the role of the CPO. The 78 qualified respondents were drawn from companies based in Europe, North America, Asia Pacific, Africa and Brazil from a diverse range of industries and sizes.

Some of the survey findings showed:

• While 64 percent of respondents had fulfilled another role in procurement, 36 percent come from roles outside of procurement.
  
  
• Some 55 percent of respondents have an advanced degree while 77 percent have a university degree.
  
  
• More than one-third of respondents moved into their current CPO role from outside the company—and many expect to move outside their current company in their next role.
  
  
• Only 14 percent of respondents feel they have complete control to manage organizational barriers, with 18 percent judging their control low or negligible.
  
  
• All the respondents are primarily motivated by the desire to help their organizations achieve high performance.
  
  
• An overwhelming majority (92 percent) feel they are perceived as effective leaders.

The research points to several conclusions about the role of the CPO:

• There are many ways to attain the CPO role. Procurement is the typical avenue, but for those coming from outside this area, a wide range of previous functions and disciplines is evident.
  
  
• Education is a factor in the career of a CPO.
  
  
• Job mobility is integral to the CPO career journey. More than one-third of respondents moved into the current CPO role from outside the company. The majority expect to remain in their current roles for fewer than three years—and most expect to move into bigger roles.
  
  
• CPO priorities often go beyond their performance metrics. Most are judged on savings and budgetary measures, but more than two-thirds of respondents believe that a broader set of metrics around total cost of ownership should be used.
  
  
• CPOs are experiencing some conflict between actions and outcomes. CPOs’ priorities include achieving savings targets, attracting and retaining the right talent and addressing organizational barriers—but fewer than half of respondents indicated that they had complete control over these outcomes.
  
  
• CPOs are clear about their aspirations and future needs: helping companies achieve high performance is key.

Four issues concern CPOs the most:

• Addressing organizational barriers.
• Achieving savings targets.
• Attracting and retaining new talent.
• Addressing supply risk.

To overcome these challenges, CPOs are clear about what constitutes the success factors: passion (100 percent), capability (96 percent) and perceptions (99 percent). However, CPOs are less certain that they meeting these factors. Satisfaction scores are lowest when it comes to their success with internal stakeholders and, in particular, the board.
 
Clearly, these are areas where CPOs need to pay attention in the future.