When will procurement stop transforming? It’s a serious question, and one that I explored with the CPO of a US-based pharma company recently.
It was a fascinating conversation – not least because we didn’t speak about Donald Trump; not even once. Instead, we dug into how procurement is constantly in reinvention mode, on a never-ending journey to reset, transform, prove value and maintain relevance across the business.
In support of the theory, I highlighted the popularity of the transformation category in this year’s World Procurement Awards, which has attracted more entries than any other and 17% of the total. For reference, we have 14 categories across the Awards, meaning each one represents around 7% of the total.
We spoke about how, for some organisations – hers being one of them – “building” a new version of the procurement function is an exercise in futility, because by the time the transformation is complete, things have moved on again, making it immediately outdated. The pace of growth at this particular business has been so fast, that a significant contributor of value is speed of execution.
She has a theory that CPOs should stop building a procurement function and start solving for the business. In essence, nurturing a team of “business leaders with a procurement skill set”. This might sound like a nuance, but it’s an incredibly powerful concept because procurement becomes an extension of each relevant business unit, bringing unique capabilities and skill sets that are laser-focused on delivering successful outcomes.
It’s worth spending time thinking about this. As digital capabilities continue to evolve and automate many traditional procurement deliverables, the future value of the function must come into focus.
This is where the procurement’s role in scouting, connecting, mitigating and scaling for business impact must be fully understood by the CPO and embraced by the business. It may run counter to conventional wisdom among procurement chiefs, but this is where energy should be spent – rather than on rebuilding the procurement ‘function’ itself.
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