The previous three years have put chief procurement officers and their performance to the ultimate test. This year’s CPO Rising 2022 Report looked again at procurement performance and identified two areas critical to taking performance to the next level — as indicated by survey respondents.
The Balancing Act
Best-in-Class CPOs have the serenity to manage through uncertain times, the courage to make tough choices, and the wisdom to make a difference. They are also highly adept at managing the present without sacrificing the future. It is of particular importance during times of great stress and change to balance the attention and resources needed to manage both today’s requirements and tomorrow’s possibilities. It is a balancing act to be certain, but a mandatory skill for any business executive hoping for career advancement.
For many CPOs, figuratively anyway, “the future is now,” so an all-in approach to today is needed. But the future does not lie on some nebulous horizon, so work building it should start immediately (even if slowly). Those CPOs who are not empowered (or simply lack the resources) to allocate time and energy away from current projects and demands must, nevertheless, find the time to build a vision for the future. As Lincoln said, “The best way to predict your future is to create it.”
Analytics and Data Visibility Capabilities
One great way to improve the future is to improve today’s performance. A majority of CPOs (52%) surveyed in this year’s study agree that the best way to take their current performance to the next level is with “better data visibility and analytical capabilities.” This has been the most popular approach for CPOs since 2018. With the rise of business process automation tools, cloud-based applications, mobile solutions, and connected devices (i.e., the Internet of Things), more data is being created each year than ever before and business leaders are capitalizing on this.
As a result, the world has become increasingly data-focused, and businesses around the globe are investing significant resources in analytics and data science to build the capabilities and intelligence that will propel them to the next level. Of course, those opportunities are only made possible by technology and the CPO’s next-level performance levers — deploying new or improved technology (30%) and making better use of the technology (25%). When viewed together, a simple and fairly straightforward ingredient for CPOs and their teams to enhance their performance and drive greater enterprise value is technology.
Technology Adoption
For many years, CPOs were fairly hesitant to dive headfirst into a large technology deployment. Around 2015-2016 that started to change, in part, due to the advances on the solution provider side in usability, integration, and functionality. Today, a majority of CPOs look at technology as a key part of their overall operation, particularly as they are managing a more transient team (shorter tenures) that is likely to be working remotely. They also understand that gaining sizable investment to grow staff headcount remains difficult and competitive. It is why driving a digital transformation was the second most common priority for CPOs this year.
When approaching the procurement technology adoption section of the report for the 17th year, many of the themes in the earlier editions continue today:
(a) Overall adoption continues to increase, albeit slowly
(b) Organizations have budgets and intentions of investing more
(c) technology proficiency levels remain mixed
(d) the most widely adopted solutions (eProcurement and eSourcing) are not yet universally used.
Of course, some things have changed. Top among them in this year’s study is the high interest in Supplier Management solutions, including Supplier Information, Performance, and Risk Management. In the past, these technologies were viewed as solutions for more mature procurement departments or those that had just experienced a recent shock to their supply chain.
The past few years of intense supply chain focus may have changed the way that some procurement organizations think about building out their technology and focus on supplier relationship management earlier in the process. What is certain is that a majority of procurement departments are relying on far too much manual activity. Since the hybrid model has become the standard for procurement teams, CPOs will need to rethink their budgets and find ways to drive more activity online.
Next week’s coverage of the CPO Rising 2022 Report shifts to procurement benchmarks — tracking performance and operational results of the average procurement department. Find out how you compare!
RELATED RESEARCH
Procurement Agility — The Next Frontier in 2022
CPO Rising 2022: Procurement’s Capabilities in 2022
CPO Rising 2022: Business As (Un)Usual – The CPO’s Top Strategies and Hurdles to Success in 2022
It’s All About the Supply Chain
