Evolution of the Chief Procurement Officer: From Cost Control to Value Creation
For many years now, chief procurement officers (CPOs) have played the role of an unsung, behind-the-scenes hero of organizations—handling various business pressure and contributing to the smooth functioning of their organizations. Their mundane lives may be taking a turn for the better as their role expands to that of a strategic one where value-creation is key.
Today, CPOs are responsible for compliance. They play an active role in merger & acquisitions and participate in strategic initiatives. This is in addition to handling supply risk management, environmental responsibility, as well as the traditional job of ensuring cost-efficiency. Hence, it comes as no surprise that some companies have started inducting CPOs into the board of directors.In many others, the employee- hierarchies are undergoing a change, with procurement function reporting directly into the C-level executives or the board. The CPOs of today enjoy greater autonomy and improved control over budgets than before.
With power comes responsibility. CPOs now have to rise to the role of a leader and take a holistic view of the organization, while making business-choices. They are expected to cultivate breakthrough ideas helping their companies leap ahead through innovation. This whitepaper focuses on how the modern day CPO’s role is evolving and how organizations too are gaining as a result. It highlights common personality traits of successful CPOs and captures cross-industry perspectives that indicate what to expect in the years to come.
A CPO survey by Booz & Co. shows that a number of factors such as cost savings delivered by well-managed supply chains, pricing analytics and growth in global outsourcing have brought about a change in a CPO’s responsibilities. His job is evolving from a tactical function to a broader, strategic role.
In today’s complex business environment, a CPO is required to think like a CEO, focusing on key business drivers from an organization-wide perspective. The role of the chief procurement officer (CPO) has expanded and evolved. There has been a shift in the focus of procurement from cost savings to a more holistic orientation of creating business-value. Our latest whitepaper talks about:
- Evolution of a CPO’s job role
- CEO’s expectation from CPOs in 2016
- 5 best practices for CPO success