With the business climate continuing to challenge, potential recession in store for many major markets in 2020, increasing regulation, trade uncertainty and intensifying competition, business leaders must use every lever at their disposal to help enhance their organisation’s value proposition.
One of those levers is procurement. But it is becoming increasingly apparent that a rich seam of opportunity to bring additional value exists within the remit of CPOs and their teams. Long have we argued that cost should no longer be the function’s primary driver, and long has been the assertion that procurement can bring further value by, for example, exploiting the innovative capabilities of suppliers, driving digital insights from the supply chain and sustainability improvements in the supply base. Speaking to 46 group-level CPOs at some of the world’s best-known companies at this year’s Procurement Leaders’ Ovation (our member-only global CPO thinktank event), it is clear the time has come for the function to step up and enhance the value it brings to the wider business. As a result, something is stirring deep within the marrow of procurement. We asked the Procurement Leaders CPO community to describe the value proposition of their function, and received some encouraging responses:
“Growth of the top line through innovation delivery, growth of bottom line through procurement cost and cash excellence, and growth of sustainability implant in land, people and plastic.”
“We drive our cross-functional network, integrating supplier technology and innovation, as well as providing market intelligence to drive us towards profitable business growth.”
“We drive improvement in all three financial requirements: revenue, operating income and balance sheet improvements.”
“We shape the world of tomorrow through our supply chain, both on innovation and sustainability while delivering a cost-competitive solution.”
“We support growth through innovation by optimising our ecosystem of partners across the value chain to enable the provision of life-changing medicines to patients.”
“We bring the outside in through innovation, technology and capabilities to make the organisation’s transformation possible and achieve fossil-free living within one generation.”
Global CPOs are turning their focus from the foundations of savings – which still must be delivered but are becoming increasingly commoditised – to more value-based deliverables, including innovation, sustainability, digital insights and capabilities, and new approaches to managing risk.