For the past 10 years, Deloitte has asked Chief Procurement Officers across the world for topics that are high on their agenda. Historically, cost savings, digitalization and sustainability have been high on the agenda, but especially over the last 18 months we keep hearing from all sides that CPO priorities are changing and that technology is the only way to thrive in the new normal for organizations. It's sometimes hard to tell fact from fiction and we believe that things are not quite that straight-forward.
The webinar “Shifting CPO priorities & the accelerated digitalization of Procurement” therefore brought together a panel of practitioners with a refreshing perspective on CPO priorities and the role of technology in Procurement. The panelists represented different perspectives and angles, from advisor to practitioner, to discuss daily challenges and observations across industries and company sizes.
- The real shift is in how we go about priorities, not the priorities themselves
- Agility is a mindset that needs to be displayed by leaders, not just advertised
- Decision support tools are needed to balance and evaluate choices in a VUCA world
- You can budget for tech investments or create efficiencies and approaches to self-fund them
- Technology needs to empower people
During the interactive discussion, the panelists agreed that the real priorities of modern CPOs might have been temporarily reshuffled but are overall still the same as before the pandemic. Living in a VUCA world with frequently changing stakeholder priorities requires resilient supply chains. And while security of supply has always been an important topic, the pandemic has increased the focused on strong supplier relationships and brought up new forms of collaboration across network partners. With supply chains being reassigned and realigned, the focus on risk as the single most important criterion has disappeared and historic priorities like cost savings, process efficiencies, digitalization and ESG move back into focus.
Marcus Kutzner, Lead Partner Sourcing & Procurement EMEA of Deloitte, pointed out that organizations ultimately need to be cost competitive to thrive in the next normal. Today’s CPO needs to have a broader focus and a flexible mind-set to not treat topics like ESG and risk in isolation, but create team structures that allow them to respond to changing priorities, disruptions, and opportunities quickly.
This perspective is in line with the overall notion that the historically process-driven ways of working require an update to keep up with the frequency of challenges and opportunities coming our way. Agility as a mindset and organizing model means that you can adapt or shift your priorities to act on new challenges and opportunities within the year and budget cycle. It’s about empowering teams by providing them with the tools and headspace necessary to deliver on stakeholder expectations.
Marielle Beyer, CPO of Roche, explained how a long-term vision provided stability and focus for her team during the pandemic while agile concepts and teams helped manage targeted opportunities and challenges in an effective way. In her perspective, the modern CPO is the architect of talent that ensures the right people and capabilities are matched with the right challenges and opportunities. This requires close collaboration with stakeholders to clearly define problem or opportunity statements and desired outcomes.
The discussion concluded with the role of technology as enabler for Procurement. The panelists shared some frustration with the current state of Procurement technology and offered advice on how to get most out of their investments. All panelists agreed that making small investments to test and learn how solutions can add value is the key to an agile technology ecosystem. The panelists were in violent agreement that besides asking for funding for technology investments,CPOs can also unlock operational efficiencies or create more savings to self-fund the experiments.
Karin Hagen-Gierer, CPO of Ardagh Group, shared her perspective on the mindset needed to drive change in organizations and highlighted the opportunities offered by digitalization. Especially investing into decision support tools that connect different data sources and support scenario planning is a key capability to improve the resilience of an organization in uncertain times. Karin warned that extracting the full value from solutions requires them to facilitate broad adoption, which sometimes can mean putting usability before functionality to drive success.
During the followingQ&A, the changing role of Procurement and CPOs over the last decades was further discussed. Managing operational efficiencies, sustainability, risk, diversity and innovation next to costs is a clear primer towards holistic sourcing decisions and underlined the importance of connected decision support tools. Besides that, the importance of empowerment and trust for Procurement teams to manage opportunities and challenges was stressed, as they are the real driver for delivering value to the organization.
For additional information on other CPO priorities like sustainability, check out the recording of our past webinar “Making sustainability actionable insourcing” or download the supporting white paper here.