For most industrial companies, the procurement of goods and services constitutes over 65-75% of the revenues. However, for most companies, Chief Procurement Officers (CPOs) who shoulder this responsibility do not even find mention in their leadership teams displayed in public domains, let alone as "key management people (KMPs).
The Irony of CPOs' Invisibility in Leadership
Is it not ironical that a role as important as CPOs, which can impact the performance of the organization significantly, is not as celebrated, visible, resourced with "tools and tackles" and "strategy professionals in the team"?
Historical Context and Challenges Faced by CPOs
There could be a historical background to it where loyalty and secrecy in decision-making in close alignment to the bosses was a key attribute in the role. Outcomes other than efficiency, transparency, competitive costs, and vendor partnering were important, and hence the function also suffered from nebulous goals for the team, opaque ways of decision-making, preferred vendors, and hence lack of competitive outcomes on quality, costs, and product or service developments.
Impact on Talent and Technological Adoption
This may have led to the function not being attractive to aspirational and bright professionals, resulting in capability gaps in the teams with unequal distribution of workload, with a few doing the weight lifting. This may have also led to the status quo of old ways of working and slow or poor adoption of technology and tools.
Issues with Archaic Processes and Key Success Factors
The archaic process, wrong key success factors, and lack of competition do not allow the competition to play out and deliver on CTQs and procurement KPIs. The gaps in the procurement process, at best a semi-automated process, act as a deterrent to the full play out of the competition.
Celebrating the Contributions of CPOs
Despite all of the above, CPOs have delivered and contributed significantly to the growth journeys of the organization, and hence the shoutout for celebrating them, making the role more visible with a seat amongst the KMPs.
Empowering CPOs with Digital Technologies
The digital technologies in the form of SaaS platforms, such as "procurEngine" - eProcurement suite and many others across the value chain, equip CPOs with Procurement Solutions for efficiency by automation of the process at one end and "digital negotiation tools" at the other and "predictive outcomes in the very near term" assisting the CPO on his Balance Score Cards for the function.
Enhancing Processes with Digital Platforms
The platforms are designed with foolproof workflows, which plug the process gaps, controls and validations for in-process quality control, and strategic levers through functionalities in the various sourcing modules, such as two-part open RFQ, Sealed RFQ, variety of auctions suited to variety of spend categories and competitive scenarios as per Kraljic metric (as an example).
Leveraging Advanced Technologies
Technologies like ML, regenerative AIs, BIs are being adopted on digital platforms to exploit the potential of technology to create further value as predictive prices, SCM sustainability with early warning systems, digital reach out/discovery of qualified vendors with aligned metrics as ESG certifications, assessment scores, etc.
The Future of CPOs: Resources and Recognition
It is time for organizations to provide the resources to CPOs at speed and see their action at the corporate Box office. There would be many SRKs with their "Pathan" like "collections" in the organizational box office (P&Ls). Let's celebrate the hero CPOs!!