How the CPO role is changing amidst the strategic rise of procurement
Chief Procurement Officer (CPO) is one of the fastest growing C-suite hires with 15% growth in 2020. Businesses have a better understanding of the strategic role of procurement in an organisation and are more aware of the value procurement officers can bring to the organisation’s overall direction and their ability to drive forward growth.
What factors are driving change for this role?
Traditionally CPOs have focussed on driving down costs, however, forward-thinking procurement officers have understood that cost savings are not the only way for procurement to support business growth. Several factors have allowed CPOs to take on a more collaborative leadership position and strategic role, including:
- New technologies and digital innovation
Technology has automated many repetitive procurement processes such as invoice processing, vendor management and contract approvals, freeing up CPOs to concentrate on value-add tasks and innovations.
- Concerns over sustainability
Sustainability issues are an increasing concern for organisations due to their impact on bottom line and a business’s long-term viability, it is important to note the challenge in this aspiration as roughly two thirds of a company’s ESG footprint lies with third-party suppliers. The logistical acumen of CPOs makes them perfectly positioned to help business achieve their sustainability goals.
- More complex supplier ecosystems
Once linear procurement chains have become complex ecosystems of partners, suppliers, internal and external customers, technologies, and functions. This complexity has left procurement ecosystems more vulnerable to disruption, outside pressures and changes. CPOs are having to think and act more strategically than ever to bring order to these complex relationships.
- A seat at the table
Several years ago, CPOs rarely reported directly from the CEO and the function was not amongst the concerns of top management. However, this attitude has shifted as the benefits of strategic procurement have been better understood. There is a consensus amongst CPOs that to function most effectively they require a board presence. High-performing CPOs are 70% more likely to be involved with all decision making.
What does the future look like for CPO role?
CPOs now need to focus on the future of the role and how best to position themselves to create effective procurement strategies that continue to underpin business growth and development. Below we list the five most important factors that will be driving the priorities of the CPO.
- New responsibilities
By strategically acting beyond the procurement function and taking on new responsibilities over other areas, such as transformation, supply-chain and growth initiatives, proactive CPOs are succeeding in shaping their organisation’s overall success. By driving value beyond cost savings, they can push objectives forward and act as a keystone of business strategy.
- Importance of data analytics
Data analytics will be key to the transformation of procurement functions; however, CPOs must ensure that analytics are integrated into business processes, rather than left sitting to one side. If analytics are not integrated fully then the insights generated will not flow successfully, actions will not be taken, and benefits will be missed.
- Focus on agility
Procurement departments that can respond with greater agility to internal and external pressures enable businesses to work efficiently whilst maximising value and increasing customer satisfaction. CPOs should aim to focus on building teams that can work flexibly, solve problems proactively and coherently. Digitisation will aid this process but so will CPOs with excellent relationship building and negotiation skills.
- Greater emphasis on leadership and collaboration skills
To lead diverse teams effectively and effect transformational change, CPOs must be one of the most capable leaders within an organisation. Purposeful, forward-thinking leaders with the ability to influence decisions at board level and build cross-functional teams will be most likely to effect transformational change.
- Finding the right people
Great leaders cannot function in isolation. Building strong teams that can fully harness the strengths of its individual members will change the game for procurement. CPOs are beginning to look beyond the procurement function to source top talent with the necessary skills for the future. Increased automation will free up CPOs to focus on the human side of procurement and getting the right people
How can Morgan Law help?
With such a complicated recruitment climate for public and non-profit organisations, leaders need to find the right recruiting partner to navigate a potential high-level skills shortage.
At Morgan Law we take the time to develop a full understanding of your requirements, meeting with you to discuss challenges and offer advice on the availability of talent in the market and how to improve your existing practices.
Our established database of over 30,000 senior-level, highly-skilled professionals with significant experience in the public and not-for-profit sectors available on a permanent and contract basis enable us to deliver the highest quality recruitment solutions.