Procurement today has evolved as a significant contributor to organisational value and has consistently emerged as a lead driving force behind trying to gain competitive advantage and enhancing enterprise performance. CPOs have moved beyond the traditional operational responsibilities and are in fact influential in shaping business strategies. By establishing a link between procurement and overall business performance the procurement function has built up credibility and top CPOs across the globe are looking at progressive and forward-thinking measures than just reactive ones.
Hence Moglix, in our leadership series is taking a closer look at what differentiates the best in class CPOs from the rest. From the kind of strong leadership traits that they exhibit to the diverse set of skill that they have mastered, here’s are three definitive markers that make them stand out:
- Moving Beyond Just Traditional Procurement Capabilities: As procurement explores the new possibilities of wholesome participation in the creation of a strategic advantage for the organisation, CPOs have started looking at innovating and delivering new value sources.
- This means that they are now leveraging influence over a wider range of areas like demand management, supplier collaboration etc. to aid in inventory reduction and spend consolidation
- Working hand in hand with newer technology, and looking at analytics to gain more insights that will help them in developing new business strategies
Being proactively involved with supplier management via targeted market intelligence also helps in the seamless management of daily procurement activities, that helps best in class CPOs free up more time for strategic task planning.
- Identifying Innovative Ideas and Partnerships: CPOs today are uniquely placed to be at the helm of innovation drives in their organisation. They can capitalise on the wealth of analytics and information from customers, suppliers, employees etc. and leverage technology to get actionable insights.
Being an innovation enabling digital leader means that progressive CPOs:
- Are very clear about the innovation goals of the organisations and meticulously build the right resources to promote and support supplier innovation.
- Are always on the lookout for potential innovation partners (beginning from an exploration of the supplier base, as many a time, the right collaborators may not be in the organisation’s existing pool)
- Have a proactive understanding of the competency and proficiency level of their team and constantly encourage them to leverage and adopt new technologies and analytics.
The fact is that innovative supplier partnerships can have broader and deeper impact and a progressive CPO recognises that very well and makes diligent efforts to tap into that resource pool.
- Being a Talent Enabler: One of the biggest challenges that CPOs today face is employee retention as well as training new talent. There are existent limitations in investing in new talent, but a successful CPO will take the following measures to ensure that his organization attracts and retains the right kind of procurement talent:
- Looking for the right kind of creative source for recruitment (be it university campuses or various functions that support procurement) for example recruiting from support functions like IT, operations marketing etc. will ensure that the talent brings with it strong business acumen, diverse stakeholder networks as well as demand insights.
- Create a conducive environment that is digital-friendly, which helps in empowering the employees with the right cutting-edge technology. Talent today is attracted to companies that provide them with the right kind of training tools as well as the environment, hence the best CPOs today work hard on creating that approach.
With the value of procurement shifting from a transactional to a core function, the aforementioned traits can put CPOs today at par with their best in class counterparts.
Thus, for the success, growth and sustainability of the procurement team CPOs today need to not only influence key players and align the function with the business strategy on the whole, but also focus on talent management as well.
What do you think differentiates CPOs at world-class organisations? We’d love to hear your thoughts in the comments section below.