The third Global Chief Procurement Officer (CPO) Survey marks Capgemini’s continued commitment to understanding the trends and issues affecting the procurement executive. Given the seismic upheavals in the financial markets and their inevitable impact on commerce, it has never been so important to assess and understand what this means for procurement within organizations.
The intent of the Global CPO Survey is to provide executives with insight into both macro issues and focus areas so they may be better informed concerning the challenges they face and the decisions they make.
Summary Of Capgemini Consulting Global Cpo Survey 2009
1. September 2009 Summary of the 2009 Capgemini Global CPO survey Responding to the challenges of economic meltdown
2. Global CPO Survey 2009 15 September 2009 Global CPO Survey 2009 In its third Global CPO Study, Capgemini Consulting reviews key issues and drivers challenging today’s procurement leaders. In the rapidly changing economic climate, it is important to identify and understand trends, and to look across industry borders from a truly global vantage point This Global Procurement Study is intended to help organizations understand the key issues and challenges facing the profession in today’s tough economic conditions. In parallel, the survey reveals the key strategies being adopted by CPOs to tackle this economic meltdown, and where further focus may be needed over the course of the next economic cycle Capgemini Consulting interviewed a total of 166 global companies across Americas, Europe and Asia Pacific during the course of this research, respondents at a senior supply chain leadership level/ Chief Procurement Officer (CPO) level. These enterprises represent a diverse cross-section of business sectors such as manufacturing, financial services, energy, utilities, retail, public sector and telecommunications etc.
3. Global CPO Survey 2009 15 September 2009 67% of respondents rated the impact of the current economic challenges as having either an acute or significant impact on their current activities and focus Effect on Procurement planning horizon Overall effect of economic conditions Procurement planning horizon has shifted to short term with focus on “survival” 28% Procurement planning horizon remains long term, as usual 20% 39% 32% 17% 12% 48% Procurement planning horizon in medium term with focus on survival as well as future 4% % of respondents
4. Global CPO Survey 2009 15 September 2009 External supplier focus is the major strategy being adopted by CPOs to mitigate the current economic downturn 19.4% 17.0% 14.5% 11.1% 9.3% 6.4% 5.6% 4.7% 4.4% 3.9% 3.7%
5. Global CPO Survey 2009 15 September 2009 Spend visibilityremains a keyproblem and for the secondyear running is the top issue facingCPOs Top 5 focus areas to date
6. Global CPO Survey 2009 15 September 2009 Which focus areas do CPOs intend to pursue as part of their Procurement Plans in 2009/2010? Top 5 planned areas for 09/10 New focus area for 09/10
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9. In the 2008 survey we found 63% of organizations favored a centralized model. In this year’s survey that number fell by over a third to just 36% of organizations.
10. We found that the use of hybrid models rose significantly from 22% in 2008 to 41% this year.7
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13. The survey results showed that a focus on supplier management to avoid business disruption from bankruptcies in the supply base was the second highest area of activity to the economic downturn.8
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15. Information provides the ability to optimise leverage, pursue informed buying decisions and ensure alignment of internal behaviours to procurement strategy.
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17. Global CPO Survey 2009 15 September 2009 A1/ A4. Participation by Geography and Sectors 19 Participants by Countries Participants by Sectors * Other industries include – Agro-business, Aviation, FM, IT, Human Resources, Life Science, Media & Entertainment, Medical Devices, Mining, Printing, Professional Services, Tourism, Waste Management, Security.
18. Global CPO Survey 2009 15 September 2009 A3. Majority of the participants are head the Sourcing/ Procurement functions and at CPO/ Director level or middle management executives * Others 4% CEO Vice President/ President Sourcing/ Procurement 3% 4% Head of Supply Chain 5% Sr. Manager/ Manager of Sourcing/ Procurement/ Commodity Manager 8% CPO/ Head of Purchasing/ Head of Procurement 56% 20% Sr. Director/ Director Sourcing/ Procurement * Others include – CFO, COO, Director of Logistics, VP Marketing & Technology
19. Global CPO Survey 2009 15 September 2009 A5. Total revenues of the organization for 2008 (US$) Participants by Revenues (US$) 28% 16% 32% 5% 14% 5% % of respondents
20. Global CPO Survey 2009 15 September 2009 A6. Total spend as a % of total revenues Spend as a % of Revenues Spend as a % of Revenues across main sectors 34% 19% 8% 13% 14% % of respondents 12%
21. Global CPO Survey 2009 15 September 2009 A7. Spend under control of procurement as a % of total spend Spend under control of Procurement Spend under control across main sectors 32% 17% 15% 10% 7% 19% % of respondents Spend under control of procurement is well above 60 % of total spend in 65% of the respondents, showing increasing importance of the function
22. Global CPO Survey 2009 15 September 2009 A8. Spend handled through e-procurement channels (catalogues/ eSourcing/ eRFX/ reverse auctions etc.)? Spend through eProcurement Spend through eProcurement across sectors 7% 7% 4% 4% 7% 10% 61% % of respondents Spend managed through e-Procurement channels seems to be very low across sectors and hence can be great potential area for further business
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24. Global CPO Survey 2009 15 September 2009 A11/ 12. Procurement Organization Structure and major commodities sourced by Procurement functions Procurement organization Structure Major Commodities Sourced (2%) 28% 9% 20% 36% 41% 29% 23% 12% % of respondents Centralized, where procurement operations are directed and managed from a single point, encompassing targets, lines of authority & prioritization De-centralized, where procurement operations are managed at either country or business unit (BU) level, with loose coordination between these procurement operations. Targets, lines of authority and prioritization tend to be the preserve of the local business/location rather than controlled by the corporate Hybrid, where activities are coordinated and center-led, but with a range of activities ceded to local control. This hybrid approach is sometimes referred to as a ‘hub-and spoke’ model. Shared Services, where procurement activities are handled through a common, organization-wide shared service centre, resulting into better operational efficiencies Outsourced, where part or full scope of procurement services are outsourced a third party/ captive BPO P centre
25. Global CPO Survey 2009 15 September 2009 B4. How long do you think this economic downturn will last?B5. When do you think commodity prices will return back to the earlier levels Commodity prices will return to original levels within… Economic Downturn will last for… 1% 3% 14% 27% 23% 23% 25% 17% 30% 37% Around 75% of CPOs believe that the current economic conditions with last well over an year into mid/ end of 2010 Similarly around 75% of CPOs believe that commodity prices will return to original levels (pre-recession) after a year
26. Global CPO Survey 2009 15 September 2009 B6. What is the change in procurement savings targets that you have observed due to current economic conditions? Change in procurement savings targets 20% 5% 6% 25% 14% 30% % of respondents
