The CPO Agenda for 2021: What CEOs want and how procurement can deliver
This past year was full of unpredictable circumstances that evaded every contingency plan business leaders had in place. As we move into 2021, CPOs are leading their teams forward with purpose, seeking to achieve greater alignment with and deliver greater value to the rest of the enterprise. Procurement leaders are seeking digital, scalable and sustainable ways of working that enable them to drive growth and deliver value for their companies with speed, excellence and agility – in times of disruption or not.
The first CPO Catalyst roundtable of 2021 featured Koray Köse, senior director of supply chain research at Gartner, as the guest speaker. This session brought together a small group of leading CPOs to discuss how procurement can best address the key challenges and opportunities that await their companies and suppliers. Here are four key themes that the group covered:
1. Focus on Operational Excellence as a Procurement Imperative
Operational excellence is essential for procurement, both by CPO’s standards and by the standards of the C-suite. A CPO must anticipate what the CEO has on the agenda for the coming year to best prepare. The resulting response may take multiple forms: resilience, workforce enablement, disruptive innovation and more. However, procurement can be almost certain that an expanded scope will not be accompanied by a larger budget or increase in resources. How procurement proves that it is an investment that can deliver immediate value to the enterprise – not an expense – is critical.
2. Prepare for the ‘Unknown Unknowns’
Procurement faces risk management challenges all the time. The difference between known unknowns and unknown unknowns comes down to whether they could have been predicted. Known unknowns require investment in recovery; they affect teams and companies that were not prepared. Unknown unknowns, however, affect everyone in a market because they cannot be foreseen. Digging a layer below the surface to categorise unknowns on a more detailed level allows procurement to engage in targeted scenario planning, adopting digital, scalable, sustainable ways of working – an investment of time and resources that can quickly translate into competitive advantage.
3. Grow from Cost to Value
Procurement must resist the pressure to become a cost centre, opting instead to function as a profit centre that drives growth and value and potentially even new business products and services. Virtually every participant in the roundtable had a growth agenda, and yet they were all different. Some teams are working to reposition the corporate brand from the perspective of the target consumer. Others are making it easier to form and benefit from strategic partnerships. One procurement team is even working on a series of 360-degree deals where the customers are the suppliers, and vice versa. All of these are growth oriented and will help companies prepare for future disruption and contribute to increased profitability and market share.
4. Embrace the Opportunity for Social Impact
Regardless of the pandemic this past year, it’s remained imperative for CEOs and CPOs to ensure their teams reflect their customers and the communities they support, which includes suppliers. Setting goals for supplier diversification and empowerment and connecting those efforts to enterprise-wide values will further align procurement with the rest of the company and deliver value in many forms for years to come.