In the past, the role of the Chief Procurement Officer (CPO) mainly revolved around procuring goods and services for the company, all the while keeping costs as low as possible. However, The 2023 ProcureCon CPO Report reveals that over recent years, the scope of CPOs' function has expanded significantly, stepping up from their traditional realm into areas such as finance, risk management, sustainability, and technology. As such, it's evident that the CPOs have become key contributors to the overall health and success of the business.
CPOs Taking on Greater Responsibilities
In the 2023 ProcureCon CPO survey, a substantial 41% of respondents noted that their CPOs have started taking a more active part in high-level decision-making over the past two years. This evolution indicates a wider recognition and appreciation of the value CPOs bring to a company. Yet, interestingly, a slight majority (47%) of respondents stated that their CPOs' roles haven't evolved much in the same time frame.
The Changing Skillset of CPOs
Along with their evolving roles, the skillset deemed necessary for successful CPOs has also undergone a shift. While financial analysis skills, negotiation abilities, and flexibility or adaptability were considered crucial in 2022, the focus has shifted slightly in 2023.
Communication and interpersonal skills are now being highlighted as core competencies, with 50% of this year's respondents emphasizing their importance, compared to just 38% last year. Moreover, there has been a noticeable uptick in the importance of regulatory and compliance knowledge for CPOs, increasing from last year's 39% to 47%.
This shift in competencies is reflective of the increased participation of CPOs in high-level decision-making. Their increasing interactions with various departments to achieve company-wide objectives necessitates advanced communication, and interpersonal and compliance skills.
CPOs' Top Focus Areas for 2023
In terms of their areas of focus for the next 12 months, CPOs are adapting to new economic challenges. While process improvement and minimizing supply chain disruptions were top of the list in the previous year, the focus has now shifted towards managing the effects of inflation, technology implementation or transformation, and delivering bottom-line savings.
According to the survey, 41% of the respondents pointed out that mitigating inflation's effects is a top concern for CPOs, while 39% earmarked technology implementation as a critical focus area. Notably, there has been an increase in the number of respondents (36%) who think that delivering bottom-line savings is a primary area of focus, up from 27% last year.
Given the likely persistence of inflation and the resulting increased costs of products and services, it's no surprise that CPOs are prioritizing cost savings for their organizations. Contract management and seeking savings opportunities during negotiations with suppliers are expected to be high on their agendas. Moreover, the implementation and transformation of technology, a consistent theme in recent years, continues to gain prominence as a tool for enhancing efficiency and identifying savings opportunities amidst rising costs.
In conclusion, the role of the CPO is ever-evolving. As they increasingly become involved in high-level decision-making, their skills and focus areas are shifting to match the demands of this expanded role. It's a transformation that seems set to continue, reinforcing the importance of CPOs in the overall health and success of a business.
Other articles in the series:
Part 1: Insights and Challenges
Part 3: Top Priorities in 2023
Part 4: ESG Monitoring and Reporting
Part 5: New Frontiers
