[Editor’s Note: In Ardent’s “Supply Management Metrics that Matter in 2018” (click here to download your copy), we discuss the supply management industry’s best and most widely used metrics that can inform and educate procurement and AP professionals on what is happening in the market and how best to build a high-performing department.]
The concept of an intelligent supply management operation is not dependent upon a single technology, process, or strategy, but rather an ecosystem of interconnected and interdependent plans, solutions, and innovations whose whole is greater than the sum of its parts. Whether in procurement, Accounts Payable (“AP”), or another business discipline, intelligent teams rely upon a few common elements: collaboration, communication, automation, data, and analytics. While many Chief Procurement Officers (“CPOs”) face significant challenges in building a high-performing and intelligent department, the Best-in-Class CPOs know that they must be able to develop and expand the organization’s intellectual capacity and invest in ways to fully leverage it across the entire scope of operations.
In an age when enterprise agility, digital transformation, and the continued evolution of the modern company dictate the pace of business, there is no better time for the rise of the “smart” procurement function. Intelligence is now pervasive throughout the contemporary business, helping to fuel new ideas and strategies and prescribe real-time responses to dynamic market pressures and challenges. Procurement sits in a more critical position than it ever has before, with its ability to impact a range of enterprise operations beyond suppliers and sourcing. The dawn of the “smart” procurement function, in which this longstanding and strategic enterprise unit expands its reach and influence through intelligence and operational prowess, is here.
The CPO’s Top People Strategies in 2018
Internal collaboration remained a top strategy for CPOs once again in 2018. The legacy view of procurement – that of an order-taker, sitting idly by until a need was identified and then reactively taking action – has been replaced by a more modern view of the function. Today, procurement is generally more thought of as a steward or influencer on enterprise spend that requires the budget-holder’s engagement and sign-off before a decision is made. The simple truth is that the groups that execute best are those that are highly collaborative. In practice, collaboration and communication with stakeholders (another popular CPO strategy) is inextricably linked and vital to the success of any procurement operation. Developing a collaborative relationship with the business increases the flow of knowledge around the organization and creates an environment that fosters intelligent decision-making.
Today, the truth is that alignment between procurement and the greater organization should not be a pipe dream; in fact, the intelligence that flows through the procurement function can be leveraged for more strategic enterprise activity. Based on Ardent’s 2018 research data, Best-in-Class enterprises are over twice as likely as all others to align the procurement function with greater business objectives.
Conclusion
There are different views on where to start, but the end-point for Best-in-Class CPOs is in finding the optimal mix of talented staff, and the right processes and systems to support them. Intelligence will help them do it. These “Metrics that Matter” represent a window into the performance of procurement and AP operations. Over the next few years, this new type of intelligence is going to enable CPOs and AP/Finance leaders to view their operations differently and, by doing so, it is going to force these leaders to manage it differently as well. The ability to make better-informed decisions across an organization can and will be game-changing. This new intelligence, coupled with agility, are going to be fundamental drivers that help push AP, procurement, and supply chain to the next level of performance.
To see all of the “Metrics that Matter” download our eBook today!
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