CPO Crunch: Looking back on the ‘year of AI’

David Rae

AI offers CPOs a unique opportunity – one that leaders must begin to factor into their long-term digitalisation roadmaps

Just before the holidays, Jim Ridgwick, director of procurement at Save the Children, led a Procurement Leaders community session to share how he and his team had executed a significant digital transformation at the charity.

The results of the transformation were profound: a 50% reduction in the number of days to delivery, as well as much tighter financial controls and supplier visibility in a sector where “because it’s a matter of life and death, speed is of the essence”. 

The CPO Connect conversation was a timely footnote to the ‘year of AI’ – a transitionary 12 months during which the potential impact of artificial intelligence became real and obvious to everyone but the most technology-avoidant luddite.

But while the transformation story shared by Jim was impressive and will have a meaningful impact on thousands of people living in desperate situations, AI didn’t feature. Rather, it was about improving the fundamentals of procurement at a global charity that operates in 116 countries in often difficult, risk-ridden situations.

Practical, pragmatic, and effective.

The march of AI and the opportunity it offers CPOs is a very different thing to a traditional digital transformation, and the vast majority of procurement functions globally will either be in the midst of, will have just completed or will be planning to embark on the latter. So, how can current digital roadmaps account for such a disruptive trend that the likes of OpenAI and Google DeepMind are working on? (As it happens, Google announced its Gemini AI model the week before our CPO conversation took place.)

Probably the most important first step is to commit to not becoming derailed from existing digitalisation plans, because success here can free up time and resource to spend elsewhere. Second is to accept that the impact of AI on procurement will be profound, so committing significant resource to thinking through what this might look like will be crucial. Third, ensure you think about fundamental system change as much as individual use cases for AI.

AI offers an opportunity to do things more efficiently, but the real winners will be those that embrace it to leapfrog current models.

New year, same challenges

While a new year has arrived with all of the energy and optimism that brings, we are right back into the thick of managing the fallout from geopolitics, this time with the Red Sea crisis threatening to cause further supply chaos.

Lessons learned from the grounding of the Ever Given in 2021 will be fresh in the memory, but those companies that kept supply redundancy and inventories in place and that didn’t squeeze suppliers in the face of spiralling inflation post-pandemic will be in a better place than those that didn’t…

Recognising excellence

This week is deadline week for the World Procurement Awards 2024. With the function playing such a crucial role in many of the biggest challenges and opportunities we face as a society, there is a need to recognise and celebrate excellence at both team and individual level. Last year’s CPO of the Year, Dan Bartel at Schneider Electric; the team at Haleon, which picked up our Award for Excellence; or any of the other shortlisted or winning individuals or companies will attest to how big a boost the Awards can provide.

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