In our endeavor to understand the procurement landscape and the requirements of procurement professionals better, we got in talks with the CPOs from Europe and had them give us some interesting insights on their life in procurement.
This three-part series summarizes 11 key takeaways from these conversations.
We asked the CPOs: What is the biggest decision you have made and how has it affected performance?
While CPOs face countless huge decisions, and such qualitative interviews do not prove cause and effect, the responses do uncover some interesting and suggestive differences between high performers and the rest of the pack. Here are the first four of 11 key takeaways from conversations with European procurement leaders:
Build a procurement brain trust: For key roles, most of the CPOs we interviewed said they not only invest in experienced talent but also develop junior talent for less critical roles. Virtually all of the CPOs we met are biased to recruiting and developing talent rather than outsourcing strategic procurement work.
- Go for maximum control: Our discussions with CPOs reveal that procurement organizations’ levels of authority and control directly affect their abilities to achieve high performance. Organizations functioning with centralized control are more times likely to report high spend under management and contract compliance.
- Report compliance data openly: One CPO particularly described to us how he pushed for transparency and sharing of compliance data with all relevant business leaders, rather than just a few. Consistent, systematic and public reporting of compliance data drove performance improvement as it took advantage of image-building and competition amongst managers and departments.
- Enforce policies & rules: CPOs are biased to rock-solid corporate governance structures – polices, rules, authorities, workflow and enforcement tactics that support strategic control and minimization of corporate spending. Indeed, the CPOs we interviewed are in strong agreement that there is a powerful connection between formal governance structures and their abilities to deliver true cost reductions to enterprise bottom lines.
As we end this initial post stay tuned for our next post.
Click on the download button below to access the benchmarking report- Huge Decision for CPO’s
