As the Chief Procurement Officer role continues to mature, greater expectations are born. And, as a procurement organization matures, its focus and scope typically expand, as does its ability to impact decisions and operations. For example, by gaining better visibility into enterprise spend and developing a clear understanding of enterprise objectives, CPOs and procurement teams are better able to influence stakeholders’ sourcing/buying decisions. And by gaining visibility into supplier performance and establishing trust and clear lines of communication, they are better able to influence strategic suppliers. But, beyond their influence on spend and suppliers, successful CPOs and procurement teams are expanding their influence into less traditional areas, driven in part by recognition of their superior performance and in part by the need to fill the void left by other, less successful groups.
For some CPOs, the convergence (or expansion) of power and influence has been a reward that was earned. For other CPOs, the convergence has been driven by a simple need to reduce costs and staff or a lack of resources and expertise in other departments. Successful CPOs can be found in businesses both large and small, across the world, and in various industries. And, those successful CPOs all have common traits that set them apart from the rest of the pack. Some of these common traits include:
- Leadership and the progression of the procurement staff. There’s a reason why “people” is regularly one of the top focal areas for today’s Chief Procurement Officers: talent is a major concern in today’s business world, and organizations must do what they can to engage and retain top-tier talent. Not only must the CPO be a true leader, it must ensure that it prioritizes the development and future progression of its staff.
- The ability to “see” what’s ahead. No procurement executive has a crystal ball, however, this function does have the next-best thing: analytics. Wild market fluctuations are becoming all too regular, and successful CPOs must not only embrace the evolution of analytics and reporting, but also link the intelligence from analytical capabilities into their decision-making. Top-tier CPOs understand the future implications of their spend, as well as the possibility of various risks in their supplier base, and can utilize today’s knowledge to make better decisions tomorrow.
The speed and complexity of business continues to accelerate forcing procurement professionals to adapt to new market conditions and react to new opportunities while maintaining discipline and efficiency. Agile organizations will win the day as enterprises become more reliant upon the relationships and events that exist beyond their walls. And, as agility and innovation started to define market leaders over the last decade, the CPO’s versatility and general capacity to support non-traditional roles and responsibilities will play an increasingly important role in how well they succeed and advance in the next decade.
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Whether by design or necessity, the responsibilities of the typical CPO continue to expand and evolve, mirroring the broader convergence of business processes and functions occurring in business today. As more responsibility converges under the CPO, procurement gains the opportunity to broaden its influence to make a larger impact. But, these opportunities and those that lie ahead cannot come at the expense of today. CPOs of all stripes (and maturities) have immediate opportunities to improve operations within their own departments. As such, they must balance the business’ need for agility, collaboration, and innovation with the discipline and focus required to extract more value from the function by stretching the limits of their organizations.
Procurement teams at enterprises large and small find themselves forced to reconsider how they drive value to the organization. With that consideration, the CPO also must determine how their shifting role—and viewpoint—can help bring procurement’s value to the organization into sharper focus.
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