With the advent of Procurement department as a ‘value creator’ in an organization, the role dynamics of Chief Procurement officer (CPO) has grown by leaps and bounds. Today, a CPO is not evaluated by cost savings and performance efficiency, but with the kind of value he brings to the table. These days business conditions demand innovation and execution abilities from CPOs to help meet organization’s objectives and to generate business value. CPOs are now playing an active role in Mergers & Acquisitions (M&A) and strategic partnerships. This is in addition to handling supply risk management, environment responsibility, as well as the traditional job of ensuring cost- efficiency.

Value Creation Gains Prominence:

The cross functional nature of the procurement department ensures that a CPO cannot operate in silos. A CPO is also required to think like a CEO, focusing on key business drivers not just from procurement stand point but from an organization – wide perspective.  But with power comes responsibility. Being in CEO shoes, a CPO is required to think differently and execute painstakingly. Here are the few steps which a modern CPO should take to make sure his department priorities are aligned with that of organization’s –

1. Execution Proficiency – A CPO should be able to envisage and execute. For high performing CPOs who want to have significant influence over commercial decisions, the increased expectations of the organization will demand improved execution, performance and leadership.
2. Right Talent – Any organization’s success largely depends on the deeds and capabilities of its people, as they are the one who drive change and deliver performance. A CPO not only has to hire the right talent but also need to invest judiciously in enhancing employee skills needed to deliver the work. This will require both acquisition of new expertise and capability building of the existing talent.
3. Deliver Results – A CPO is expected to beat the odds to deliver results. In spite of multiple challenges, he is expected to continuously innovate, evolve and deliver the best in class results. He needs to work continuously to improve his business acumen and functional expertise to accurately predict risks. He also needs to be flexible enough to respond to constantly evolving geopolitical equations and compliance rules across geographies.
4. Stakeholder Alignment – Maintaining great relationships with all the stakeholders and business alliances such as suppliers, service providers and collaborators etc. is another essential task for a CPO. This not results in developing harmony but also make the cross – functional work management easier.
5. Digital Transformation – A CPO needs to be updated with the technological advancements around him. He has to recognize the need to embrace automation to make transactional processes invisible and that could only happen through transformation to digital base. Digital transformation in procurement will provide a strong foundation for economic growth and productivity, reducing the redundant day-to-day manual work, amplifying the strategic work thus allowing employees to focus on value generating activities.

Lastly, a CPO is required to act as an inspiration for rest of his team. A clear vision, ability to deliver, knack for communication and propensity to adopt are some of the desired qualities for a CPO leader that will set the right examples for his team. This collaborative effort will eventually pave the way to achieve desired results.

Related Read:

1. Blog – Challenges of Conversational AI in Procurement and How CPOs Can Overcome Them
2. Blog – 5 Big Ideas for CPOs in Europe to Develop Procurement Strategies for 2023
3. Blog – CPO’s Approach to Manage Meetings – Make the Team don 6 Thinking Hats
4. Research Report – CPO Game Changer Series Volume 1: Early Engagement
5. Download White paper – 5 Ways the Oil and Gas Industry can Boost Savings and Profits