CPO Study 2017: Exploring the Role of Technology in Procurement Strategic Transformation
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The role of procurement is changing, though the core commitment to creating value that drives its evolution remains the same. In a large part, these changes are being enabled by developments in the technology procurement has at its disposal, allowing CPOs to introduce automation, self-service buying, and detailed analytics that provide more easy-to-use tools that capture larger amounts of data. For these reasons, a center-led model is emerging as the preferred organizational structure for procurement within global organizations. In the midst of these structural changes, the role of the CPO itself is being imbued with the authority to influence the larger strategies of the businesses they serve. With increasingly detailed analytics providing insight on patterns of spending, streamlined tools for processing routine purchases, and invigorated relationships with other department heads, CPOs are entering a period where they are more influential than ever before.
Key topics include:
- Centralization of procurement may not mean scrutiny of purchases made across a global organization; rather, a Procurement Center of Excellence now serves as a strategic command center and provider of consultative value optimization, while recognizing that certain commodities cannot be effectively globalized.
- Procurement is looking forward to greater levels of automation, Big Data utilization, and more internal client-friendly sourcing tools in order to transcend the tactical focus of their roles, fully dedicating themselves to strategy.
- The strategic element of procurement is widely coming to focus on the concept of value creation. Within the role, a consultative relationship with other business leaders is the new gold standard, wherein procurement seeks to collaborate around sourcing by meeting teams half way, as opposed to taking a rigid stance aimed at simple cost reduction.
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