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.
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:
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.
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:
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. You can read more about that here.
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.