CPO Catalyst: The future procurement organisation is now

In partnership with Globality

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Discussion attendees:

Dr. Jan Wüllenweber
Senior Partner
McKinsey & Company


Isabel Hochgesand

CPO
Beiersdorf



Colleen Soukup

CPO
General Mills


Keith Hausmann

CRO
Globality


Bertrand Conqueret

CPO
Henkel


Angela Qu

CPO
Lufthansa
Nick Jenkinson
CPO
Santander UK
Marielle Beyer
CPO
Roche



How leading CPOs are reimagining the function to deliver more of what their companies need

Under the pressure of extraordinary circumstances, the world of procurement is evolving faster than ever before. The collision of economic volatility, transformative technologies, and growing social and environmental concerns—not to mention the pandemic—is making traditional ways of working increasingly unviable.

But for leading CPOs, these challenges present an extraordinary opportunity to rethink and reshape their procurement organizations to better position their companies for the future. So how are today’s CPOs reimagining their operating models, management principles, and teams to create tomorrow’s procurement organization, and how do they make the pivot at such a volatile and challenging time?

For this CPO Catalyst roundtable, we brought a small group of leading CPOs together with guest speaker Dr. Jan Wüllenweber, Senior Partner at McKinsey & Company, to discuss how procurement leaders can improve performance, inject agility, and add value by transforming how their functions operate, how their people work, and how they use technology.

Here are the six key points they discussed:

1. Seizing the opportunity presented by today’s challenges

CPOs know that most procurement functions need major transformation both to address current challenges and to make the best use of new technology to deliver competitive advantage. But transforming an organization and increasing technological capability requires serious investment in time, effort, and resources. The difficult environment businesses are currently facing creates a unique opportunity for CPOs to highlight the value they are delivering, enabling them to raise procurement’s profile and secure the support needed for procurement transformation across the wider enterprise.

2. Integrating analytics into business processes

To get to grips with today’s complex and volatile environment, analytics must be at the heart of any organizational transformation. But as the procurement function’s technology capabilities grow, there is a risk that the insights generated do not fully flow throughout the rest of the business, meaning the benefits are missed. Procurement leaders must ensure they embed analytics into business processes rather than leave them sitting to the side. As one of the CPOs said of their analytics capability, “If it is not integrated with the business, and if we don’t have an activity system around it, then nothing happens.”

3. Using automation to free your people up for the human side of procurement

So how can CPOs ensure their analytics-generated insights are having an impact on the business and its processes? The group agreed that it is vital to get the right procurement people partnering with the business, driving improvement, and solving problems. The difficulty is that this will take a lot of their time when they are likely to be stretched already. The answer to this conundrum is to look to automation to take an ever-increasing share of the load. One of our roundtable members described this reliance on technology and automation as forming the “digital backbone” of the organization, with increased use of AI and machine learning allowing for higher levels of high-touch procurement.

4. Escaping the silos to focus on agility

Procurement professionals need to evolve their roles toward “more high-touch, more human” work. But to successfully transition to this new role, procurement leaders need to be liberated from old organizational silos. Businesses should reimagine themselves in less rigid and more agile, project-based ways. This will help ensure the right talent is working on the right tasks and that genuine business problems—challenges that almost always transcend old organizational structures—are addressed.

5. Working with the business to understand what it needs from future procurement

You cannot deliver the procurement organization of the future without understanding what the wider enterprise needs. Close business partnering was identified by many of our roundtable members as an increasing part of what future procurement teams will do. One participant spoke of aiming to reduce the distance between the procurement function and the business “to zero.” However, as the function changes and the benefits it delivers change, conversations will be needed to ensure there is a similar shift in the business’s expectations—a shift that will need to be reflected in KPIs. For example, if the business is ambitious about innovation or increased sustainability, procurement’s efforts in these areas might have to come at the cost of less focus on other metrics.

6. Looking beyond the procurement function to find the talent you need

Business-partnering skills are clearly in high demand, along with a deep understanding of technology as well as strategic and change leadership skills. But how can today’s CPOs manage to gather all these skills together in one team? Any talk of a talent shortage is misplaced, but CPOs must place more emphasis on working out exactly what talent is needed and, where necessary, looking for it within the broader business, beyond procurement. Furthermore, one of the many advantages of this shift to new ways of working is that it will help in the struggle for talent. As procurement increasingly involves more dynamic, end-to-end, project-based work, companies will find it easier to attract, retain, and develop the procurement leaders of the future.



This event is held in partnership with Globality

Globality is revolutionizing how companies buy and sell services with the world’s only AI-powered Smart Sourcing Platform and Marketplace. Globality’s Platform automates the demand creation, supplier identification, proposal evaluation, and statement of work processes, matching companies with outstanding suppliers that meet their specific service needs. Globality has enabled Global 500 companies to shorten the sourcing process from months to hours while delivering savings of 20% or more. For more information, visit Globality’s website at www.globality.com.

DPW

DPW is the global innovation and mission-based ecosystem for digital procurement. We are driven by our purpose: To unlock the true power of procurement through excellence in digital.
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