Today, an attempt to write something that doesn’t focus 100% on the coronavirus pandemic….

It is an interesting time to be working in procurement. This is true across all industries and regions of the world. Business and product cycles continue to collapse placing greater pressure on all companies to make better decisions faster. For many, the speed of change within business is magnified by the volatility found in their supply markets. Globalization and innovation have allowed companies to develop new products, enter new markets, and increase sales, but they have also made things increasingly complex for procurement leaders around the globe. In 2020, leading Chief Procurement Officers are not sitting on the sidelines. They are in the middle of the action and they are, to be certain, making an impact.

In the battle for corporate profits, efficiency, and performance, the Chief Procurement Officer and the Chief Financial Officer are natural allies. Each are marked by a prominent role that demands greater performance. And yet, more often than not, these generals and their battle-tested teams are marching to the beat of a different drummer. Enterprises that allow this CFO-CPO ‘gap’ to exist will find themselves exposed to the demands of an increasingly volatile and global marketplace, while the CFOs and CPOs who combine forces will lead the way to Best-in-Class performance.

As more CFOs gain awareness regarding the opportunities that exist within their current P2P operations and begin to champion P2P transformation initiatives, more enterprises will invest resources to improve and ultimately automate the function by deploying P2P solutions. Ardent recommends that enterprises formalize the finance and procurement partnership. If the partnership between finance and procurement is going to be long-term and meaningful, it is vital that both groups are on the same page as it relates to their responsibilities, goals and objectives. These areas (and the larger relationship) should be developed in a formalized manner with regular interactions and status checks.

While P2P excellence is desired, it is far from guaranteed. The primary hurdles facing P2P programs today are no different than those that were faced by the early P2P initiatives started 15-20 years ago. Poor Supplier Enablement which is when the system does not have (a) enough suppliers enabled on the system to perform enough transactions and/or (b) enough supplier content in the system for users to find and requisition what they need. Against the backdrop of rapidly evolving (or devolving) supply chains, how organizations communicate, collaborate, and transact with their trading partners and the enabling platforms that they utilize take on increasing importance to business operations. Organizations should set aggressive supplier enablement goals and leverage third party assistance when needed. Leveraging solutions and solution providers that enable more suppliers, more quickly, accelerates the “time to value” in a P2P initiative and allows the trading partners to divert resources away from the tactical aspects of the relationship and focus on the more strategic ones.

In 2020 and beyond, CPOs will again 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. It will also greatly benefit from the support, counsel, and partnership of finance and the CFO.

Are you a CPO interested in a CFO’s perspective? Consider registering for CFO Leadership in the Time of the Coronavirus now on-demand.

Are you a CFO interested in a CPO’s perspective? How about Five CPOs? Consider attending our CPO Rising 2K20 Summit Thursday at 11 am to hear 5 CPOs discuss Business Continuity, Resilience, Recovery, and “where we go from here?”. 

RELATED RESEARCH 

Ardent Partners’ P2P Metrics for 2020 – LAST WEEK TO GET THIS EBOOK

Tagged in: CFO, Chief Procurement Officer, Collaboration, CPO, Innovation, P2P, People, Process, Strategy