Ardent recently completed its sixteenth annual CPO-themed market research study, “The State of Procurement & the CPO”, which is part of an ongoing dialogue that my team and I have had with Chief Procurement Officers (CPOs) and other procurement leaders for more than a decade. Over the next few weeks, we’ll be discussing the results from this year’s study in a series of articles on this site. If you’d like access to this report, make sure to register for our newsletter with a business email address.
In 2021, many CPOs and their teams will be asked to deliver sizable results in the face of both new and ongoing challenges caused by the pandemic and the uncertainty it has created. To succeed, procurement leaders must follow the courage of their convictions as they start to reframe a “New Normal” procurement environment and how it engages and operates amidst change and uncertainty – bold ideas and approaches will be needed. Ardent Partners recommends the following strategies and approaches for CPOs and procurement departments seeking to improve their performance:
- Be proactive – Most enterprises have big challenges in other parts of their business. Now is the time to engage your CFO and key business leaders and offer support.
- Accelerate your digital transformation – The digital transformation of a procurement department is an opportunity to use technology as a means to reimagine and scale operations, drive efficiencies, broaden expertise, and codify best practices.
- Go all-in on Big Data – Become one of the new “breed” of resourceful and innovative CPOs who have taken a data-driven approach to making sourcing, buying, and risk management decisions.
- Source more aggressively – Sourcing is not a bold strategy; but any time there is a greater focus on cash and savings, it is time to source more aggressively.
- Partner with the business to attack supply risk – The impact of supply issues hits multiple stakeholders. Supply risk is best managed by cross-functional teams, led by procurement but including others in finance, operations, and the line-of-business.
- Revamp and rethink your contracts – Market events create inefficiencies that smart organizations can exploit. What are the immediate and longer-terms shifts caused by the pandemic? Have the length and duration of your contracts exposed you to unnecessary market risk?
- Reexamine, and where possible, reimagine the supply chain – Most procurement leaders inherited their current supply chain. The pandemic has provided ample reason to examine the why, what, how, and with whom businesses trade. Now is the time to determine if existing supplier relationships make sense or if there’s a better approach.
- Empower your team – Keep your team engaged by giving them greater control. Words help…but actions are important.
If you are interested in learning more about the key procurement and CPO data collected in our annual research study, consider listening to Ardent’s brand new “Procurement Rising” podcast series. Click below to listen to new episodes. The podcast is also available on Apple, Spotify, Stitcher, Google, or wherever you get your podcasts.
