IBM: Top Chief Procurement Officers Drive Higher Profits
A new IBM study shows that high-performing procurement organizations are driving higher profits through use of big data analytics, social and more.NASHVILLE, Tenn.—At its Smarter Commerce Global Summit 2013 here, IBM announced a study that says companies with high performing procurement organizations are driving better bottom-line results. According to the study, these organizations report profit margins of 7.12 percent as compared with just 5.83 percent for companies with low performing procurement organizations. Also, companies with top performing procurement organizations report profit margins 15 percent higher than the average company—and 22 percent higher margins than companies with low performing procurement organizations, IBM said. The 2013 Chief Procurement Officer Study was conducted by the IBM Institute of Business Value (IBV) and highlights the business impact that chief procurement officers (CPOs) can have on a company's competitive advantage and profitability. It explores how top performing CPOs can increase their influence over strategic business imperatives by driving efficiency and performance, introducing innovative new processes, and uncovering new insight into supplier networks that have a measurable effect on the bottom line. "This is all about helping procurement officers meet the need of their customers," said Alisa Maclin, vice president of marketing for Smarter Commerce at IBM, at a press conference introducing the study.
Maclin touted the IBM study as the largest of its kind. It surveyed 1,128 procurement executives in 22 countries across North America, Europe and Asia Pacific. Of the respondents, 15 percent were found to be top performers, defined by their ability to exert influence and drive innovation across their companies, while also excelling at procurement fundamentals, said Chris Wright, a senior product strategist at IBM.