The business world is forcing its executives, like the Chief Procurement Officer (“CPO”), to adapt to changing market conditions, customer demands, and technology innovations in order to drive greater value. With so much uncertainty in business today, it is imperative for CPOs and procurement teams to become agile, innovative, and highly responsive to the shifting sands of the “new normal”, while charting a clear course for future.
Last week, on The Procurement Rising Podcast (click to listen and subscribe), I spoke with Greg Tennyson, the CPO & VP of Corporate Services at VSP Global, on a wide range of topics, including his career in procurement and pandemic-related topics like managing a distributed workforce and how to sustain results through difficult times. One of the interesting parts of our conversation revolved around where we see the procurement profession is going and how it will fit in to this “new normal” of the business world.
Procurement as Trusted Advisor
Blockchain, along with artificial intelligence, machine learning, and robotic process automation, have been some of the hottest buzzwords in the software and technology industry, and its notoriety has spread to the procurement and supply management industry. And while the digitalization of procurement will continue in earnest, there is also been a push to enable the business itself to have direct access to what has previously been traditional procurement tools. Greg sees the business running sourcing events itself in an RFx tool and having direct access to spend analytics, not only to help inform the sales organization for prospecting reciprocal trade perspective, but to better manage relationships as well. In that regard, Greg sees procurement “becoming more and more of an advisor to the business in a consultative role and not having direct responsibility.” The business itself would be directly driving transactions going forward while procurement leaders and their teams would be able to put more of a focus on advising the business, and put less of a focus on compliance, spend under management, savings, etc.
The key will be how to enable the business to become more agile and how best to utilize that agility in the market. This will be especially important, given the fluidity of the environment in which the business operates. With procurement becoming more of a trusted advisor and leader, rather than a tactical source of process-oriented operations, it can in essence spark the necessary strategic shifts to transform other key functional units into agile powerhouses. This will allow more and more lines of businesses to become truly dynamic functions that can be proactive to the rapidly-evolving market conditions in which businesses now operate.
Agility is the characteristic that will help procurement teams to advance and thrive in this new age where innovation continues to expand beyond mere products and services to core business processes and entire business models. Agility, however, does not grow organically; Chief Procurement Officers and other procurement leaders must take deliberate steps to build agility into the DNA of the staff and operations, or they risk being left in the dust as more nimble and versatile organizations find value and opportunity before they do.
To remain at the hub of business operations and results, CPOs and other procurement leaders must start to adopt new strategies, embrace today’s innovations like on-demand talent, marketplaces, and Big Data analytics, and they must also prepare for a future that is very quickly becoming the present. Given the complexity of the business function, and the broad range of constituents it must support, procurement success demands strong, visionary leadership that includes CPOs and their lieutenants.
You can listen to my full podcast with Greg Tennyson below. The Procurement Rising podcast is now available on Apple, Spotify, Stitcher, Google, or wherever you get your podcasts.
