Are you looking to create greater value from your procurement-supplier synergies but strict sustainability & regulatory compliances, risk vulnerabilities along with political instability are bringing in new challenges for you?
This blog summarizes an exclusive on-demand webinar concluded by Zycus for the Nordics region with Bernard Gracia, Director & Dean at European Institute of Purchasing Management (EIPM) and Thomas Bioud, Regional VP, EMEA, Zycus. To replay the full webinar, please click here
Figure 1: Speakers of the session
With increasing pressure for organizations to contribute toward Environmental, Social, and Governance (ESG) mandates, the responsibility is on the procurement team’s shoulders to strategize and make collective efforts. Recent technological developments, political relations, strict compliance mandates, and uncertain times have resulted in what Bernard talks about changing roles of buyers and suppliers in this VUCA (Volatile, uncertain, complex, and ambiguous) world.
Bernard mentioned the 3 changing roles of the buyers, “In yesterday’s world, robots were capable of doing a large part of the technical work of buyers – supplier identification, selection, pitch…. etc.” In tomorrow’s world, the role of the buyer is no longer limited to the technical element of only selecting the suppliers. Robots cannot handle relations with suppliers, they are incapable of facilitating & improving relationships with suppliers based on human fit. This was the first significant change in the buyers’ role. The second big change is the focus on R&D in fostering innovation to discover the right set of suppliers. The third prominent change is that buyers now also have to consider decarbonization, they need to select suppliers based on price and carbon footprints.
For these 3 changing roles, there is a need to develop new competencies. The framework below depicts the agenda they need to follow:
Figure 2: Framework for today’s procurement buyers
Source: Bernard Gracia, Director & Dean, EIPM
There has been a change in buyers’ focus from existing suppliers to tier 2 and tier 3 suppliers, to startups, and new suppliers in today’s world. Yesterday, technical expertise and understanding of cost, finance, and micro-macro economy was required. Today, understanding of some other basic behaviors is also needed, such as marketing mindset, business acumen, leadership, and agility. There is a need for knowledge and understanding of Design Thinking, decoding supply chain, digital mindset, workflow management, and decarbonization.
In the end, Bernard specified the core mantra for suppliers – VALUES…FOR VALUE! This means that if you don’t have any value, don’t expect the same from your suppliers.
Thomas shared his views on technology with the help of various CPOs surveys. He mentions that as per Gartner’s Leadership Vision for 2022, the CPOs faced the following 4 key issues in 2022:
The management of these four key issues has shifted priorities as well as the perception of the procurement function in this era. It is viewed from a different lens – the aim has shifted from delivering cost savings to value creation. Now, the attention is centered around bringing in innovation & technology to digitize the end-to-end procurement processes.
A recent survey conducted by Hackett Group depicts the changing priorities of procurement leaders over the years:
Figure 3: Changing Procurement Priorities over the years
Source: Zycus Pulse of Procurement, Hackett Group
As per Gartner’s Peer Insights on Procurement Technology Investments, many organizations are already implementing or are in the process of elevating core procurement technologies like P2P, Spend analysis, eSourcing, Contract Life Cycle Management, Supplier risk management, and VMS. But when it comes to next-generation procurement technologies such as Robotic process automation, Advanced procurement analytics, Artificial intelligence, Advanced sourcing optimization, and advanced contract analytics, most organizations are currently not pursuing them.
We at Zycus believe that the time has come for the transition of CPOs to become Chief Cognitive Procurement Officers (C2POs). Chief Cognitive Procurement Officer (C²PO) persona is a leadership role driving adoption of next-generation procurement technologies. C2PO enables the team to focus on strategic goals (beyond mere cost reduction), while automating tactical routine work/tasks with AI, low-code automation tools. This leader drives use of prescriptive and predictive analytics for smarter decision making and prioritizes software tools providing a compelling user experience (UX) to drive adoption across the enterprise. C²PO evangelizes and enforces sustainable procurement practices. Figure 4 provides 4 key value drivers for a C²PO.
Figure 4: Key Value Drivers for a Chief Cognitive Procurement Officer (C2PO):
To get more in-depth insights, watch this webinar now!