CPOs are coming under greater pressure to increase savings despite many having their own budgets cut, according to research by Accenture.
A recent study by the consultancy found that 55 per cent had experienced budget reductions, with 14 per cent seeing cuts of over 15 per cent.
Fifty-nine per cent had seen a corresponding increase in the amount they were expected to save, with 18 per cent reporting a rise of 15 per cent or more.
“CPOs are coming under increasing pressure to deliver savings and manage risk at increased speed whilst experiencing pressure on budgets and turbulent supply markets," said Jeremy Robinson, Accenture's UK sourcing and procurement lead.
The survey also revealed the growing challenge of monitoring supplier health in the current climate.
Almost 70 per cent of those polled said they were paying more attention to suppliers’ financial stability, with 18 per cent saying providers had not been able to meet their requirements.
Thirteen per cent had seen a supplier go out of business or taken over by another company; over half had experienced suppliers attempting to increase prices; while a further 45 per cent said suppliers were actively resisting working capital reduction projects.
However, the survey did suggest that the battle to retain the most talented procurement managers was less intense. Forty-three per cent of respondents thought it was now easier to hold on to decent staff than before the downturn took hold, with 33 per cent saying there had been no change and 19 per cent finding it more difficult.
The global recession is also having a big impact on companies’ capital spending and production plans for 2009, a separate survey by the US Institute for Supply Management (ISM) suggests.
Forty-two per cent of ISM members planned to reduce their levels of capital expenditure slightly, with 35 per cent expecting to make substantial cuts.
Forty-three per cent were planning to reduce production capacity, with 34 per cent of these expecting the lower level to last for six to 12 months.
CPO Agenda’s own survey of over 100 CPOs and senior purchasing professionals, last November, found that three-quarters had seen their objectives, priorities or resources directly affected by the downturn.
Of those that had yet to experience any impact, two-thirds expected to do so during the first two quarters of 2009.
