Cost savings are both a blessing and a curse for CPOs: although the function can hit its targets and demonstrate the impact it can have on the business, the organisation will always want more.
Procurement chiefs know, however, their teams have so much more to offer besides savings. Give function leaders the time to invest in stakeholder relationships and they will find new product and process innovations that will help the business operate faster, get new products to market quicker and grow its market share.
The problem for procurement chiefs is that they are stuck in a seemingly perpetual cycle of trying to move away from simply focusing on savings but are pulled back by shortsighted colleagues and economic pressure.
Each year we hear in the CPO planning guide, Procurement Leaders’ annual study into procurement chiefs’ plans and strategies, that CPOs want to move their functions onto more strategic projects during the year ahead. The following year, however, we learn they actually focused on cost savings.
But how can procurement chiefs break this cycle? Planning and influence. A function, its leader and the staff within that team need both short- and long-term goals, as well as a roadmap that demonstrates how those goals will be achieved. While savings will be part of the plan, procurement chiefs should also include the strategic projects the function wants to implement and the steps it needs to take to get those moving.
They also need to understand what other procurement chiefs are focused on and where they believe pain points, or indeed opportunities may exist that they may have missed. That’s the power of the community and that power should not be ignored.
Here at Procurement Leaders we are trying to support the community here by gauging the views of procurement executives on what plans they have and trends they see shaping the function in 2019. We are collating all these views into a report, which we will publish in September. All of those who take the survey will receive the full report.
Help us to help you by taking the survey now.
The article originally appeared in PLQ Volume II, Issue III. To find out more about PLQ click here
This article is a piece of independent writing by a member of Procurement Leaders’ content team.