While all of the Chief Procurement Officers in our CPOs on the Rise in 2011 series have all been kind enough to support the site and our industry by sharing their stories, not all of them are able to share their names. Today’s CPO is the first who appears anonymously. We have known him for years and based upon his experience and role (the VP of Procurement at a Fortune 100 company), it is fair to say he fits perfectly in this series. The words that he shares below are his based upon a recent online Q&A exchange.
Q: How has the role of procurement has changed over the last few years in your company and since you took over your department?
Answer: Procurement at my company has changed dramatically. The Procurement team has implemented consistent processes for procure-to-pay, sourcing, and contracting. In addition, we provide analytical data that was not available via accounts payable systems. There is no mandate to use my team (soft guidelines), but we have gained the trust and generated confidence in the process we make available. It is important to note that all of this change management was possible as a result of purchasing and implementing the Ariba suite of spend management tools.
Q: What are your department’s top priorities and objectives for 2011 and what are the biggest risks in achieving them?
Answer: Top priorities: more sourcing, more contracts (with KPI’s), spend analysis, more categorization of spend. We are also interested in exploring/implementing solutions for SPM and supplier risk.
Our top risk is having and keeping manpower to achieve our goals. We are a small team.
Q: How have you (or will you) aligned the goals of the procurement department with those of the business and those of the larger enterprise?
Answer: We are not considered to be highly strategic, I would say that the alignment we have is around efficient processes and cost effective solutions internally as well as externally with our supply chain.
Q: Who do you report to in the organization? How is your performance and the performance of your department measured (i.e. what are the metrics, how are they measured, and by whom?)
Answer: There are two procurement teams at my company. One team reports to the CTO and focuses on IT spend. I report to the SVP of Administration and Human Resources. Our metrics are
- Cost savings
- enabling spend in the P-to-P process (amount of spend captured)
- Contracts with KPI’s (amount of spend captured)
- My team also manages the Supplier Diversity program for which we have various metrics related to increasing awareness and spend.
Q: What are your thoughts on procurement-led innovation?
Answer: Innovation for my team involves creating/marketing more internal customer relationships to provide value added processes. Innovation at my company would also involve bring sourcing processes to non-traditional areas for us like marketing and legal. There are still many ‘spend owners’ at the company who do not know that we exist! We constantly challenge our suppliers to bring us better products and services in a more cost effective way, without sacrificing quality.
Q: Where is procurement headed in this next decade and/or what would you like to see happen within procurement in the 2010s –
Answer: I’ve given up making predictions after 20 years in this business! 🙂
Q: How can the measurement/evaluation of you and your department’s performance be improved?
Answer: Be compensated for savings as a sales person would for sales!
Thank you “he, who shall remain nameless,” another CPO on the Rise in 2011.
Tagged in: Case Study, Chief Procurement Officer, CPO, CPOs on the Rise, Strategy
