This week’s segment of the CPO Rising 2022 Report explores procurement’s capabilities and its ability to drive value. Chief Procurement Officers must integrate themselves with key executives and constituents to ensure they remain abreast of changing market and enterprise dynamics. Let’s take a closer look.
Procurement’s Capabilities in 2022
When it comes to capabilities, the majority of procurement teams today are able to leverage spend data for their sourcing events (69%); many also maintain an active sourcing pipeline (63%). These two complementary capabilities top the list of organizational capabilities according to those surveyed by Ardent Partners this year.
The fact that a majority of procurement teams can leverage their spend data to drive sourcing events through a standardized sourcing process is a net positive for this cohort and a stark reminder for those that cannot yet do this that they are laggards.
Collaboration remains a critical capability for procurement because it is the bedrock of innovation, helping procurement accelerate the proliferation of ideas. Innovation academics and investors believe that the speed at which interdisciplinary ideas can cross-pollinate is a powerful determinant of the pace of innovation within an enterprise and across a supply chain. This is doubly true when managing a distributed workforce.
With its linkage to so many different internal and external stakeholders, the procurement department has more opportunities than most functions to broadly impact operations and results. And, if procurement’s essential remit is to influence stakeholders to make smart decisions, it needs two things:
(1) Engagement with the stakeholders
(2) Intelligence and context to guide wisely.
Collaboration and visibility are the critical enablers of these two areas and thus serve as the foundation upon which procurement success is built.
Align and Conquer
Procurement’s ability to create value and influence results is greatly enhanced by its ability to engage budget holders and functional peers in proactive conversations. And, when procurement resources are focused on the most important business projects and initiatives, overall results are optimized. This year’s survey shows that a high percentage of procurement departments are both engaged and optimized with 27% of all groups stating that they are tightly aligned and another 46% stating that they are generally aligned with the CEO’s agenda.
Today’s leading CPOs must be able to identify the best opportunities quickly and execute them just as fast. They must also have a clear vision, be able to garner support for it, and then drive it forward. It is critical that the CPO validates exactly what the best opportunities are because a department that operates on its own agenda, independent of any real input and oversight from either executives or business stakeholders, does itself and the enterprise a disservice. As such, all CPOs should make it a habit to regularly interact with key executives and constituents to understand how the business is changing and what the organization needs to do to be ready for that change.
In next week’s segment, we’ll dive into procurement agility and how it is linked to an enterprise’s brand and overall value. The four characteristics of an agile procurement department will be explored.
RELATED RESEARCH
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Savings Is Much More Important in 2022
It’s All About the Supply Chain
CPO Rising 2022: Business As (Un)Usual – The CPO’s Top Strategies and Hurdles to Success in 2022
