Over the last two decades or so, the chief procurement officer’s role has taken a gradual turn from tactical to strategic. But if you thought your organization’s procurement department had reached full maturity, think again. While some CPOs still have room to grow, others are taking their strategic influence to new levels by expanding their reach into new business units—or, in companies expanding their reach across the world, by setting up centers of excellence.
The proof is in ProcureCon’s most recent CPO Study, in which data demonstrates major changes in standards since last year. The below infographic takes a look at year-over-year findings and where CPOs’ newfound confidence might take them in the next few years.
Download the infographic here.
To download the full study, click here.
The rising tide of procurement’s influence continues to elevate the role of the CPO. As C-Suite leadership recognizes just how much value sourcing activity provides the business, more CPOs have transitioned into co-architects of business strategy. In terms of how they prove that value, there’s been an unexpectedly major shift in the past 12 months.
ProcureCon CPO survey: year-over-year findings
Compared to the results of last year’s CPO study, 2018 data reflect a growing confidence in CPOs who are settling into much more influential roles.
The share of respondents who consider full centralization critical to their procurement strategies
- 2017: 11%
- 2018: 37%
- “A center-led organization, while different, doesn’t deliver the same value as a fully centralized model. In my opinion, it misses on the economies of scale that are available under a centralized model, as well as the ability to gain more visibility into areas ripe for improvement.”—Greg Tennyson, CPO, VSP Global
The percentage who are right on schedule to complete their strategic transformation
- 2017: 52%
- 2018: 58%
- “It’s interesting that 6% feel they’ve completed or are close to completing their strategic transformation. I would submit the maturation of any function is never completed—it’s a journey.”—Greg Tennyson, CPO, VSP Global
The percentage of respondents either well-aligned or fully aligned with the goals of the business at large
- 2017: 66%
- 2018: 73%
- “As part of a consultative team, sourcing needs to understand when the business is trying to invest versus cut costs. From a strategy perspective, you want to partner with a business by looking at sourcing as a small sales team.”—Linda Chuan, VP- Head of Global Technology Sourcing, Thompson Reuters
Beyond procurement’s current state of maturation, experts say, there is still room for improvement.
The CPO and the C-Suite
Now that CPOs have built close, strategic relationships with fellow C-Suite leaders, they can develop stronger alignment with businesses across the organization.
These newfound relationships lay the foundation for increased cloud and automation adoption, which reduce tactical, manual work and give CPOs more time to develop and share insights with their counterparts. This consultative style of leadership isn’t so much about cutting costs, as the CPO’s role has always demanded—it’s about overall value creation.
Download the 2018 ProcureCon CPO Study for a full analysis of these findings and key recommendations for forward-thinking procurement teams.