The traits of a progressive CPO, part two

The traits of a progressive CPO, part two

By Omer Abdullah

By Omer Abdullah

15 October 2018

In the second part of this blog series, Omer Abdullah says procurement chiefs who wish to be truly progressive need to embrace innovation and the digital revolution

In the second part of this two-part series on becoming a progressive CPO, Omer Abdullah looks at two traits CPOs must develop if they are to be considered truly progressive and reap the opportunities that exist outside of their traditional savings remit.

Trait three: Be an innovation enabler

CPOs are uniquely positioned to help drive the innovation agenda in their companies; they directly influence the supply partners with which the organisation works and, as such, the ideas and capabilities these suppliers bring to the table.

The right partners can help jumpstart product and process innovation while buying organisations can tap into these suppliers’ capabilities to expand the depth and breadth of R&D activity. This, in turn, helps the buying organisation accelerate the development of new and better products and services.

As such, supplier-led innovation not only improves relationships but also drives revenue growth, which allows for increased cost savings in both organisations and fosters greater cross-functional collaboration, which helps build procurement’s credibility throughout the company.

Procurement chiefs who want to enable innovation should focus on the following activities:

  • Clearly articulate the organisation’s innovation goals.
  • Evaluate and assess developments within the supply market as well as suppliers’ capabilities.
  • Engage the executive leadership team to secure their buy-in.
  • Identify potential innovation partners. Although CPOs should start by exploring the supply base, the right partners may not be in the company’s existing pool of suppliers.
  • Clarify each party’s intellectual property rights upfront.
  • Build the right resources to support and promote this supplier innovation.

While companies have a tendency to become insular when it comes to innovation, more businesses recognise the impact that broader and deeper supplier partnerships can have. As a CPO, you need to tap into that recognition.

Trait four: Be a digital leader

Digital procurement and data analytics are at the heart of next-generation procurement chiefs should look to take advantage of.

Such technologies are widely expected to help the function boost its performance and deliver greater value to the organisation through the ability to analyse key spend information and from that make better decisions.

But, at present, few functions use spend data in the right way to drive their decision-making. This is largely because CPOs do not ask or answer the right questions when it comes to data analytics.

Leaders should ask themselves:

  • What are the different data sets that are currently accessible?
  • How clean are these data sets?
  • What is the current level of competency and proficiency of my team to understand and manipulate these data sets?
  • What tools does the team currently leverage to analyse this data? How do they run sourcing events?
  • How well has any new existing technology been adopted and accepted in the organisation?
  • What is your plan to drive the adoption of technology and analytics going forward?

By asking these questions and finding the answers, CPOs will put themselves and their functions on the path to becoming far more progressive and ready to meet the demands of the future.

In the first part of this blog series, Omer looked at CPOs being true business partners and talent enablers, as well as the steps leaders can take to embed best practice and drive new sources of value.

Omer Abdullah is cofounder and managing director at The Smart Cube

This contributed article has been written by a guest writer at the invitation of Procurement Leaders.

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