The procurement leaders of tomorrow: Key traits for future CPOs
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As procurement plays a more strategic role in business, many professionals in the field are having to adapt their skillset to keep pace with the function’s evolution. Although this is an exciting time, many procurement leaders are under increased pressure to reinvent traditional operations, whilst taking on more responsibility for end-to-end customer experience and other growth-oriented functions.
Procurement leaders are driving value beyond cost reduction and efficiency and are taking a more proactive role in shaping their company’s success. There’s also a need to help define this broader vision for procurement and educate the wider business on both its operational and strategic value. Understanding how modern procurement leaders differ from their predecessors is key to future-proofing the function and building the next generation.
What’s causing the role of CPO to transform?
These shifts in the scope of the procurement function and the skills required by the modern CPO have been caused by a variety of factors, such as the continued disruptions caused by COVID-19, Brexit and the possibilities opened up by new technologies and ways of working.
These have brought into sharp focus any inefficiencies that may have been allowed to develop in procurement functions. Procurement must stop being reactive. Instead, future driven procurement must avoid bottlenecks and become a more agile and responsive function to guarantee business continuity.
6 procurement skills and competencies required by the modern CPO
CPOs must be ready to diversify, to find new suppliers and support current ones at short notice. They must also be able to respond to short-term shocks and long-term trends equally well. Other skills modern CPO’s need to develop to position themselves as procurement leaders of the future include:
1. Transformational leadership
The ability to lead from the front, as well as having credibility with senior stakeholders from across the business and beyond is only one aspect of exceptional leadership. Procurement leaders should also be capable of making the right choices for their business’s future, hiring the right skills needed to address skills gaps and successfully implement digital transformations. They should motivate their workforce to adapt to new skills, new technologies and new procurement functions to work more effectively.
2. Knowledge of technology
Current and future technologies are changing the way procurement teams operate. Cloud computing, automation, machine learning and data analytics are already transforming the future of procurement.
A recent survey of procurement leaders found that CPO’s already spend 25% of their time discussing how tech is changing the way procurement teams respond to challenges. Developing a technology-first mindset will be critical for CPOs who will need to be curious, open-minded, and knowledgeable about the technologies which will transform procurement.
The term agile procurement is used frequently in discussions of the procurement team’s future. Agile procurement is an operational model focussed on outcomes which allows for greater flexibility and relationship building between businesses and their suppliers. Agile procurement teams will require agile leaders to guide them. An agile CPO should:
- Anticipate and address challenges through a customer focused outlook and an effective intelligence network.
- Use connected and integrated analytics systems to analyse procurement data and use that data to drive decision making.
- Be flexible and responsive by using process knowledge and experience to focus on delivering outcomes.
- Build relationships with suppliers, stakeholders, and customers to better communicate the value of the procurement function.
4. Collaboration and transparency
Making connections and building relationships across the wider organisation is a key part of the CPO role. Therefore, CPOs should be skilled collaborators who use their position as part of the C-suite to provide transparency regarding procurement functions by encouraging cross-organisation participation. Collaborative CPOs should also be skilled diplomats and negotiators, knowing when to push for outcomes and when to concede graciously, building trust and balancing procurement goals with wider business success.
5. Functional expertise
A CPO should have exceptional expertise regarding procurement functions. This requires a genuine curiosity and commitment to ongoing personal learning and development. A CPO should stay up to date with the latest regulatory developments and maintain a connection with the wider procurement community.
6. Understanding of business strategy
Procurement needs to align with wider business strategy to secure long-term success. The CPO must understand the fundamentals of business strategy and how procurement fits in. This knowledge will also help the CPO explain new procurement technologies, tools and concepts to senior stakeholders and their procurement teams.
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