Welcome to a three-part article series on the concept of “visibility.” The term visibility is thrown around quite frequently in the procurement and spend management worlds, and it is incumbent of today’s Chief Procurement Officers (CPOs) to do all that they can to ensure that they enable visibility into corporate spending and provide other key stakeholders with the necessary insights into financials to help effectively forecast, plan, and budget for the future. The first entry in this CPO Rising article series highlights the top three areas in which procurement often lacks visibility…and what they can do to drive a better view into these spaces.
The modern procurement executive and Chief Procurement Officer often lists “improve visibility” on their corporate to-do list nearly everyday. For some organizations, this goal is often a pipe dream or something they “feel” they should be doing in the greater scheme of supply management. However, top-tier CPOs realize that improving visibility isn’t a simple goal on a list crowded with other objectives: it’s a formidable, real target that must be achieved in order for procurement to drive true value across the greater enterprise.
CPO Rising is excited to present a three-part series on the value of visibility, what it means for the contemporary Chief Procurement Officer, and the several key attributes that can help these procurement leaders enhance overall visibility within their respective organizations.
Today’s article kick-starts the visibility conversation by highlighting the three major areas of visibility (high-level categories) that plague the average procurement executive:
- Financial visibility. The crux of procurement typically lies in its ability to drive cost savings – often cited as the number-one challenge in the vast majority of procurement functions. Thus, visibility into the financial aspects of the group is key to its overall success. What is the procurement group’s current savings target? Is there a satisfactory level of identified cost savings in the current supplier base? How effective are we in appropriately implementing and realizing those cost savings? And, most importantly: is there a real-time means for analyzing current vs. projected cost savings?
- Category-specific visibility. While we’ll dive into category-specific visibility in more detail later in this article series, it goes without saying that rise in utilization of complex spend categories, such as contingent labor and business travel, is actively forcing procurement executives to balance management of direct and indirect spending in such a way that enables visibility on a deep, category-level. Aspects such as talent quality, ROI of business travel, and branding consistency are just a few of the areas that comprise the concept of category-specific visibility.
- Compliance visibility. Some procurement professionals may argue that compliance, not cost, is the true crux of the function…and their argument would be difficult to ignore. Compliance, in the form of procurement contract compliance, is certainly an avenue that is top-of-mind for the modern Chief Procurement Officer. Visibility into the status of supplier contracts and current purchasing efforts against those agreements has and will always be a prime concern for the procurement function.
The next entry in our “Visiblity” series will tackle category-specific visibility and what it means for the CPOs of today.
RELATED ARTICLES
Chief Procurement Officers in 2014: Procurement’s Convergence with Cash Management
CPO Rising 2014: Convergence – Spheres of Influence
Rites of Spring (2014): Procurement’s “Annual Cleaning”
