Publisher’s Note: This report is now available in the Ardent Partners library at a substantial discount. Click here to learn more.
Happy New Year!
Are you ready for 2014?
We are and we believe that 2014 will be an exciting year for Chief Procurement Officers and other readers of CPO Rising. January begins with a flurry of activity. Next week, we will launch our 2014 CPO-focused research study (watch for that and please participate) and on January 23rd, we will conduct a webinar: Procurement: Big Trends & Predictions for 2014 (click to register)
We begin our year by following up on our just published report, Becoming a CPO in 2014: The Qualifications, Experience, and Characteristics of a Chief Procurement Officer, and discussing a few choice CPO quotes from the interviews I conducted in support of the report. As its title suggests, the report looks at the key qualifications, experience, and characteristics needed to ascend to the role of Chief Procurement Officer in 2014. It’s a good reference document for those on the cusp of becoming a CPO and for those getting started on a career in Sourcing/Procurement. The report is available by clicking here (registration required).
In 2014 and beyond, Chief Procurement Officers will be required to extract more value from the function than ever before and stretch the limits of their organizations while also maximizing the relationships they have with suppliers and internal stakeholders. Procurement’s ability to impact business processes, business relationships, and business results will surely continue but the depth and breadth of that impact will depend on the organization’s ability to master processes and technologies and upon the ability of its leader, the CPO, to maintain the department’s focus and ensure crisp execution and decision-making through periods of uncertainty and high stress. Many of the CPOs interviewed for this report shared this view. Here are a few –
I. “To be a successful CPO in 2014, you must be able to extract value of the discipline far beyond a simple savings number by working with internal stakeholders to be more agile, reduce risk, enhance supplier performance and increase revenue.” – Anders Lillevik, CPO
The idea that procurement can deliver more than savings has become somewhat of a cliché but that makes it no less true. For years, I have questioned the use of savings as the sole or primary measure of a procurement department’s (or CPO’s) performance. I think doing so diminishes or constrains the total value of what procurement does for an enterprise. Also, there’s significant risk in hitching your wagon to a savings star because there are simply too many factors beyond the control of a procurement team that ultimately determine final savings numbers. Anders is exactly right when he says that CPOs must do much more than hit a savings target. They must become more collaborative. They must use different levers to drive performance and impact the business. Agility (as we discussed here) is critical to top performance.
2. “I do believe companies are stressing different things now – moving from traditional procurement – right price, right place, right time etc. to more vendor and supplier relationship management.”– Andrew Swift, CPO, Affinion International
As the Chief Procurement Officer role matures (remember, it is is relatively new), greater expectations are born. As a procurement organization matures, its focus and scope expand. As Andrew suggests, 2014 is the time for CPOs to move beyond managing only the basic duties of the function and seek to drive more strategic supplier relationships.
3. “My perception is our industry is looking for leaders in 2014 that think beyond the current circumstance and are addressing issues their organization will face in 2-3 years. They want leaders that have a long term perspective, can achieve goals in an ambiguous environment and can communicate at the board level.” – Steve Murphy, Enable Midstream Partners
While the investment community has intensified its demand for short-term company results. The wise CPO must balance those demands with a longer-term increase in value that procurement can deliver. Agility, in the short-term, is critical; Steve believes that a clear vision and an ability to anticipate and plan for the future are too and that they are as critical to the advancement of any procurement executive.
Becoming a CPO in 2014: The Qualifications, Experience, and Characteristics of a Chief Procurement Officer is available for today. (registration required).
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