With the release of my 18th-annual CPO-themed report, my team and I continue our nearly two-decade-long dialogue with CPOs and other procurement leaders. The report examines the general competencies and capabilities of procurement organizations today and highlights the management strategies and tactics that leading CPOs have utilized to drive their organizations forward over the past few years as well as their stated plans and priorities for 2023 and beyond.
The report also presents a comprehensive, industry-wide view of what is happening in the world of procurement and captures the experience, performance, perspective, and intentions of 341 CPOs and other procurement executives.
Over the coming weeks, we’ll take a deeper dive into the risks, challenges, technologies, and opportunities that CPOs and their teams face in 2023 and beyond. There’s no better time to be in procurement. The potential to extend the function’s influence in the enterprise and elevate procurement’s performance is at CPOs’ fingertips.
State of Procurement 2023
The role of the Chief Procurement Officer (CPO) has become both universal and critical to operations and outcomes, as business executives have recognized the strategic value of procurement in driving profitability and growth. However, the events over the last three years have dramatically altered the global supply chain landscape, creating unprecedented challenges for procurement professionals. As the pandemic recedes and businesses drive forward, CPOs find themselves at a crossroads, facing critical decisions that will shape the future of their organizations for decades to come: How and when to unravel their global supply chains? How and when to truly achieve a digital transformation?
CPOs, the Crossroads, and Decisions Ahead
In literature, the term “crossroads” refers to a significant moment or decision point in a character’s life or in the overall plot of a story. It is a pivotal moment where a character must make a choice or face the consequences of their actions, and this choice often determines the direction of the story or the fate of the character. The term is a powerful literary device that highlights the importance of choice and decision-making in storytelling. It serves as a reminder that the decisions we make can have far-reaching consequences and that every moment is an opportunity to shape our own destiny.
In 2023, the CPO is standing at the crossroads. The challenges facing CPOs today are numerous and significant. While the pandemic is no longer viewed as a major risk to business, it exposed vulnerabilities in supply chain processes and highlighted the need for greater resilience and agility. The well-documented supply chain disruptions over the past three years led to shortages of critical materials, delayed shipments, and increased costs, causing substantial financial impact on businesses in all industries and geographies.
At the same time, technology is rapidly transforming the procurement and supply chain landscape, presenting both opportunities and challenges. The adoption of technologies, both new and old, continues to offer great promise, yet most fail to drive broad adoption and great value. Digital transformation, such as it is, remains illusory for many, even as its potential grows larger with big data analytics gaining momentum across the enterprise.
In 2023, CPOs must manage near-term risks and challenges to the business but they must also start making larger and more impactful decisions regarding the long term. The CPO must now assess the effectiveness of their current supply chain strategies and determine whether to reimagine it or merely refine it. They must also decide once and for all how serious they are going to be about their use of technology. These major decisions, made at the crossroads, will shape the future success of their organizations and determine the course that procurement will take in the years ahead.
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