C-suite roles are shifting and expanding as companies face increasing global competition, evolving technology, growing regulations, and shifting cultural attitudes. Businesses turn to those top-level executives to do more than their titles may imply; they look to them to stay abreast of technology advances and industry trends; to take on a more strategic role by utilizing the enormous amount of readily available data; and to inspire, motivate, and cultivate employees. This is a tall task; but those that prevail help their companies experience greater success. From the CEO to the CFO to the CPO and beyond, there are certain behaviors and attitudes that distinguish those that push their companies forward.
In December of 2014, the IBM Institute for Business Value published its 2014 Chief Procurement Officer Study, “The journey to value: Transforming procurement to drive the enterprise agenda.” One of the primary goals of the report was to pay special attention to “procurement role models with the most positive organizational impact on revenue growth and profit improvement.”1 These role models contribute to the overall success of the company by focusing on enterprise success, integrating technology into their discipline, and welcoming innovation. Those CPOs from underperforming enterprises tend to focus on traditional procurement practices and processes, while paying little attention to more strategic and innovative initiatives. The difference between role models, [leaders] and underperformers [laggards] is really quite striking when it comes to the topic of bringing technology, analytics, and automation solutions into the enterprise.
As the study states, “Procurement role models automate the ordinary…to accentuate the extraordinary.”2 So how do leaders and laggards differ when it comes to embracing innovative procurement solutions?
- 82% of leaders believe that procurement technology includes strategic solutions such as supplier management as compared to 66% of laggards3
- 72% of leaders said that their company’s procurement processes were automated compared with 47% of laggards4
- 91% of leaders believe that advanced analytic solutions should be a part of procurement technology vs. just 67% of laggards and 41% of leaders have actually integrated advanced analytics into their procurement actions vs. just 16% of laggards5
- When it comes to innovation initiatives, 52% of leaders have brought in sourcing technology to automate vendor selection as opposed to 31% of laggards6
What the report illustrates is that a narrow focus on only those practices that are the traditional purview of procurement may impact the performance of the department but won’t do a great deal to drive company growth. Focusing on savings, risk, and product supply form the foundation of procurement, but there’s an opportunity to go much further, to become a strategic leader within the organization. CPOs that embrace technology and innovation have much more than just a seat at the C-suite table; they have an impact.