The future for procurement chiefs will involve balancing the potential of people with the development of new technology in order to become more focused on meeting business needs.
Eva Milko’s regular column appears in Procurement Leaders Magazine.
There is no doubt in my mind that procurement has the opportunity to become – if it’s not already – a mindful and strategic steward of organization’s resources, bringing forth new methods to drive innovation, grow revenue and address customer needs via flexible and innovative supply solutions. And why not?
Procurement sits squarely in the center of the entire value chain. The function become an important career stop for leading talent and we are finally combining all of the right ingredients to lead the way.
A word of caution: for those of us who continue to rely heavily on cost savings as our favorite measure, research suggests that the cost to consistently achieve significant cost savings may actually cost the organization a lot more effort and resourcing than initially predicted. Procurement scorecards are becoming increasingly balanced, yet remain focused on cost and working capital initiatives.
Technology will continue to provide a significant boost to procurement teams but the initial investment and ongoing maintenance costs may seem prohibitive to some. At the recent Ariba Live conference, the future of business networks was at the top of the agenda. Business networks, through the use of cloud technologies and mobile applications are becoming the way of the future. The convergence of people, technologies and processes is here to stay. And yet, employees are nervous that their companies are not ready themselves to prepare their employees for the future to come. While coding seminars and algorithm building classes are a norm these days, most employers are behind the curve on encouraging development of these skills.
Equally, there is a lot of discussion in the marketplace around big data. Procurement has the skills and the knowledge to become the synthezier of market , customer and supplier data. Meaningful insights will lead to spotting of opportunities and risks across the entire value chain. The information is out there and procurement can be the team to lead the mining of these insights. Customer and brand-centered procurement teams is an evolution towards faster customer response with more meaningful product lines, higher end-user satisfaction and greater returns. Matrix organizations are here to stay, requiring greater skills in collaboration, prioritization and communication.
A CPO of the future will constantly balance the ROI of people versus technology-based organization. Predictive analytics, alert-based workflows, exception management will lead the way. So where is the organization going from here?
Tom Seal, Procurement Leaders’ head of research suggests that we must begin our journey towards revenue and customer based solutions. Many of us have remained on the cost side of the equation and such leap feels impossible. Refocusing the organization to become the hub for supplier-led innovation is becoming a priority. Expect innovation from the suppliers and incentivize the network to collaborate across channels and remove internal barriers for ideas to turn into profitable products.
And finally, revenue and profit measures must become part of the balanced procurement scorecard and the CPO of the future will lead the way in finding opportunities to improve Total Shareholder Return formula across all levers and sub levers, including revenue generation.
It is encouraging to see some of our members who are making their way towards this future, with many more to follow. Happy travels!
This article appears in Issue 56 of Procurement Leaders Magazine.
Illustration courtesy of Leo DeLauncey.
This article is a piece of independent writing by a member of Procurement Leaders’ content team.
from Procurement Leaders Blog http://ift.tt/1Iydbid
This content was assembled for you by the YQ Matrix platform
The views expressed in this post and throughout the series are the autor's own and not intended to reflect the views the YQ Matrix platform, its users or any associated organisations.
For the procurement people among you, have a look at the latest YQ Matrix raw material and semi-finished prices. For: Prices on other websites.
No comments:
Post a Comment