Ardent Partners recently published our annual CPO Rising report (entitled CPO Rising 2014: Convergence) and of all the reports we publish this year, the focus of this report is exactly geared towards our regular readers (CPOs and those who aspire to the role). The report presents a comprehensive, industry-wide view into what is happening in the world of procurement and captures the experience, performance, perspective, and intentions of 273 Chief Procurement Officers and other procurement executives. As we do every year, we interview many Chief Procurement Officers (24 procurement leaders in total) to add context to this research effort. The report is available (with registration) from several sponsor sites including here, here, here, here, here, or here.
Chief Procurement Officers’ Top Challenges in 2014
One of the biggest challenges for CPOs this year is their lack of engagement with internal stakeholders, and in turn, winning more buy-in across the enterprise. Although it’s not the top challenge for Chief Procurement Officers in 2014, it remains a significant one. In some ways, getting the right mix of people engaged with procurement is the classic struggle in procurement.
The CPO’s Top Challenges in 2014
One of procurement’s chief responsibilities is to manage spend across the enterprise; in order to do this well, procurement has to engage with each budget-holding group within the enterprise to ensure that they’re on board with procurement’s mission. But, with the average enterprise managing just 60% of spend, enterprise procurement teams would benefit from greater engagement, either qualitative or quantitative, with business stakeholders. Of course there are many reasons why a procurement group is managing less than 100% of spend; this is not entirely linked to procurement’s level of engagement, but this does play a significant role.
Without authority over other parts of the business, Chief Procurement Officers and their teams try to influence internal stakeholders and bring them onboard the procurement train. But as we’ve seen in our “Skills for the Modern Procurement Pro” series, when it comes to the people skills that foster engagement, (such as business consulting, project management, and presentation skills) procurement pros out on the front lines could stand to improve.
At the heart of business consulting skills lies the ability to work well with others, listen to problems, propose solutions, and execute upon them in a timely and professional manner. For procurement/sourcing teams, this entails establishing a relationship with functional peers in finance, legal, HR, the executive team, or business unit leaders, collaborating with them to share and explain how procurement can specifically support their goals. Then, once engaged, execute strategies, keep projects on track and budget, and influence the final decisions. For procurement, the earlier it gets engaged in a project, the more influence it can build, and the easier it becomes to succeed and ultimately place more spend under management.
Procurement work and sourcing in particular is quite-often project based, so procurement departments must also utilize their project management skills and processes – things like clearly defining the scope of the project, setting milestones, monitoring and reporting progress, assessing project risk, and ensuring timely completion. Poorly managed or executed projects can easily cause the enterprise to spend more money than it should, dampen performance, and erode procurement’s influence. At the end of the day, it’s much easier to retain influence than it is to win it back after a poorly executed project.
Another way that procurement teams can overcome the engagement challenge to hone their presentation skills. These skills drive credibility. Credibility enables teams and individuals to influence with or without authority, and allow them to navigate the ins and outs of heavily-charged, inter-departmental collaboration. A compelling presentation can make the difference between getting the decision maker’s buy-in or not. (It goes without saying the presentation must include solid understanding of the opportunity and a good plan). Proper presentation can lead to greater engagement, which in this case can help your team execute projects that save money, improve quality or all of the many things that procurement can influence
Getting engagement and alignment on processes and goals are in every project team’s best interests, but as procurement’s role converges with other business area, utilizing strong business consulting, project management, and presentation skills can help procurement teams get better engaged and ultimately increase its influence.
RELATED ARTICLES
CPO Rising 2014: Convergence – Top Challenges in 2014 (I)
Skills for the Modern Procurement Pro: Summary (Part I)
Skills for the Modern Procurement Pro: Summary (Part II)
CPO Rising 2014: Convergence…. The CPO’s Three Year Plan
