CPO Crunch: Operating models evolve

David Rae

Procurement must be flexible, scalable, resilient, agile and efficient

Operating models can be complex beasts. The traditional conundrum for CPOs has focused on whether to adopt full centralisation, to manage a decentralised environment or to sit on the fence and go down the middle with a hybrid route.

The benefits of the former are full compliance and spend leverage, the trade-offs are seen in functional agility, speed to market, and local-market knowledge and diversification. Decentralised models solve the problems introduced with centralisation but at the sacrifice of local service. It’s why hybrid models continue to be popular.

But increasingly, the Procurement Leaders community is exploring variations on the theme – variations that are enabled with the ongoing adoption and advancement in technology, but which are increasingly being mandated as a result of the evolving global landscape.

It’s why our ‘performance’ 2024 Glide Path work is focused on how CPOs can create agile operating models for enhanced value delivery. And it’s why a large amount of the conversation that took place at the World Procurement Congress focused on the issue.

(Sidenote: our very own Jack Torrance has produced a brilliant report Beyond centre-led: The future of procurement operating models, which is now available for members. The study is a culmination of several different community discussions and workshops and provides a great source of inspiration for those CPOs exploring operating model evolution.)

Take Sirsij Peshin, CPO at Pfiizer, who shared on day one of the Congress how procurement is at the heart of the wider organisation’s purpose of working towards “breakthroughs that change patients’ lives”. As part of that, Sirsij took a fresh look at his own organisation’s operating model and with that a renewed focus on the supplier eco-system, his stakeholder needs and the increasing specialisation of roles within his team.

The ultimate goal is to build a procurement function which is agile and responsive to those disruptive forces (and opportunities) which are here to stay, while having the process and governance in place to enjoy the benefits of scale.

Our Performance Glide Path report is a good place to start.

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