In ten years’ time, the procurement profession and the role of the Chief Procurement Officer (CPO) has changed in many unique and profound ways. Yet, just like 2010, CPOs and other procurement leaders are entering the new decade grappling with intense challenges (some old, some new) and driving forward to achieve aggressive goals and objectives.
On that front, I’m pleased to continue with our exciting, new series on CPO Rising – “20 for 2020” which examines a broad range of CPO-driven topics. Today we continue with 20 for 2020: Key Themes for the Modern CPO’s Agenda (#14 – Digitization), which is designed to help procurement set their organizations’ course for the critical months and years ahead. Enjoy!
20-for-2020: Theme #14 for the Modern CPO’s Agenda: Digitization
In 2020, digital processes and systems are no longer considered novel. In fact, for more than two decades, the digitization of business has been steadily impacting enterprises of all shapes and sizes. It has enabled line-of-business users to collaborate more closely with stakeholders, execute more effectively, scale resources, and enhance the quality of their work. Digitization has also enabled business leaders to gain more visibility into the health and direction of the business, drive governance, risk management, and compliance efforts, while propelling many organizations to the next level of performance.
Digitization has evolved from an innovative trend in the late 20th century to a core competency in the 21st century. For most organizations, it has become a “must-have” capability that requires the investment of human and IT resources in order to staff and drive a truly digital enterprise. Despite the advances that have been made in the development of business solutions to make them more robust, user-friendly, and accessible, stakeholder organizations, like procurement, supply chain, and finance, still benefit from the support, advice, and experience of their IT partners. These IT leaders can help rationalize user requirements, identify the strongest solutions available, and drive/support the projects to deploy them.
Chief Procurement Officers (“CPOs”) and Chief Information Officers (“CIOs”) should be at the forefront of digitization. They are the first among C-suite equals who lead and advise the different team efforts across the enterprise to attain and deploy solutions. Stakeholder organizations, like procurement, supply chain, and finance, rely on CIOs and IT departments to spearhead system selection, negotiation, and deployment and oversee or directly support ongoing operations. Without their expertise, leadership, and executive gravitas, digitization projects are less likely to succeed in either the short- or long-term.
Of course, their presence, alone, is not enough to ensure that innovative systems and tools take root and flourish within an organization. CPOs and CIOs need to take leadership roles in not only the management of IT (strict digitization), but in the larger digital transformation arc. They need to set the strategic direction of IT within the enterprise, and develop a holistic approach that synergizes native strengths and avoids duplication of resources. They need to ensure that systems match and align with the existing (and/or planned) IT infrastructure and standards, as well as any governance policies and mandates that IT has established. To do this, they should be engaged early in the digitization process so they can properly collaborate with their fellow C-suite leaders, like the Chief Financial Officer (“CFO”), and develop a deployment roadmap that optimizes results. In short, CPOs and CIOs need to be the catalysts for digital disruption and innovation, and then be the “good shepherds” throughout the digital transformation process, not just digitization, which can derail without the proper planning and guidance.
Final Thoughts
As business leaders and managers, CPOs and CIOs have vital roles to play in digitizing the source-to-settle process. As the core technologies have evolved, so too have the roles of modern IT teams. Self-service, user-friendly business tools and cloud-based solutions, like spend analysis tools, are freeing up IT staff from getting involved in tactical, day-to-day operations, like data pulls and solution refreshes, and are elevating their roles to become strategic change agents within the enterprise. As a result, CPOs and CIOs and IT teams must get engaged early in the solution selection and integration processes and remain engaged as a captain and navigator of digitization efforts.
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