The top four skills CPOs need in a changing world

Data-driven technologies, accelerated digitization and evolving supply chains have “dramatically elevated” the role of procurement professionals, according to a report.

The report by executive search firm Heidrick & Struggles (H&S) said: “The role of the purchasing manager (CPO) in most industries has been more fundamentally transformed over the past two years than many other management roles. . And yet, the transformation is far from complete.

The report, Reset the role of the purchasing manager, involved interviews with 11 purchasing managers from companies such as Unilever, BT and Vodafone. He said purchasing managers were at the “center” of modern business models and had been “considerably elevated from a role that not so long ago was primarily focused on process efficiency, cost control and compliance ”.

Covid-19 ‘perfectly illustrated’ how extreme disruption in the supply chain has forced procurement organizations to face the limitations of traditional operating models, report says, pushing businesses and procurement teams to adapt.

Bertrand Conquéret, CPO of the chemical company Henkel, said: “While traditional skills will become less important for the CPO, they will remain important for the purchasing organization as a whole. “

Here are the skills CPOs should develop to prepare for new trends:

1) Establish relationships in complex ecosystems

A study by strategic management firm Korber found that 91% of companies were unable to stay ahead of the complexities of their supply chain. Therefore, H&S said that in order to be successful, CPOs will need to “improve their game” and immerse themselves in the “ever-growing maze” of building relationships with vendors, partners, customers, employees, investors and stakeholders.

Kai Nowosel, CPO at Accenture, said in the report: “CPO is increasingly becoming a connector; the role is no longer a question of competition but of integration and collaboration. The role is increasingly anchored in the connection of networks and ecosystems rather than in the management of processes and tenders.

Hervé Le Faou, CPO at Heineken, said: “The CPO is evolving into a ‘value leader’, a partner and co-leader of the CEO who is able to generate value through business, digital and technological partnerships. , and sustainability, which are new sources of profitable growth in an evolution towards a sustainable economic model.

“As a result, we are seeing a new generation of externally focused purchasing managers who are able to bring in outside and advise the CEO on how to best earn. “

2) Integrate sustainable development at the heart of purchasing

A study by consulting firm McKinsey & Company found that two-thirds of a company’s average ESG footprint comes from its suppliers. “CPOs are therefore responsible for most of their company’s ESG performance,” H&S said.

Conquéret argued: “CPOs must also be leaders in terms of sustainable development. Both roles require superior influencing and networking skills. The report highlighted how companies such as Diageo and Givaudan have integrated supply chain, purchasing and sustainability into a single executive role.

Cyril Pourrat, CPO at BT, said: “When it comes to ESG implementation, it’s often down to procurement to do it with suppliers, which involves significant effort and resources.

Besides the environmental and social benefits that ESG factors bring, there is also a strong business case for them – ignoring sustainability factors can damage a company’s reputation.

Angela Qu, CPO at Lufthansa Group, said: “Any unethical or illegal shortcut will cause long-term damage to a company’s reputation and position in the market.

3) At the forefront of digital innovation

“Gaining an advantage over the use of data across an organization can be a critical competitive advantage,” the report explained. According to a recent Deloitte survey of sales managers, only 6% of organizations have fully deployed predictive analytics systems, and only 15% are evolving them.

Pourrat said CPOs don’t need to focus on implementing specific e-procurement tools, but rather evolving their businesses into “new ways of working.”

This can be achieved by managing processes and connecting more deeply with the business through the implementation of procurement tools in the business for wider use.

Jane Liang, CPO at British American Tobacco, added: “The CPO can become a key partner for many parts of the organization by bringing digital innovation to the business, for example in the form of platform purchases and advanced data analysis.

4) Provide strategic information about the company

Purchasing managers interviewed told H&S that they anticipate CPOs will become increasingly integrated into the business and seen as peers to senior managers in terms of responsibility and influence.

Sebastian Bals, CPO at biopharmaceutical company UCB, said this was due to CPOs’ ability to have a “fully cross-sectional view of the rest of the organization,” which meant they were “designed to provide the best insights and services to all stakeholders, without any selfish ambition or agenda ”.

Klaus Staubitzer, CPO and head of supply chain at Siemens, said Covid-19 has helped raise the profile of CPOs and “earned purchases greater license to act.”

He said, “Now board members and CEOs of companies are asking buyers for their perspective on the offer situation before speaking to investors.”

Therefore, CPOs should have the confidence and ability to influence at the board level.

Ninian Wilson, CPO at Vodafone, said: “We are seeing internally that boards are requesting sessions directly with the CPO on supply risk and are more concerned and involved in supply chain matters. .

“Externally, we interact with many new external stakeholders, such as NGOs, governments, regulators and even prime ministers. ”

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