Previously, the Chief Procurement Officer's (CPO) primary responsibility was centered on obtaining goods and services for the company, with a focus on maintaining low costs. But the 2023 ProcureCon CPO Report reveals a substantial, transformative shift in the role of CPOs lately. They have moved beyond their conventional function, taking on additional duties in fields such as finance, risk management, sustainability, and technology. Consequently, CPOs have become essential contributors to enhancing the overall well-being and prosperity of the business.
Procurement Function: More Than Just Sourcing
Traditionally, procurement is known for sourcing products, technology, and services including managed services, SaaS products, and essential operational items. Such investments shape the company at large, from altering financial processes to changing the dynamics with suppliers.
CPOs Leading the Digital Charge
An astonishing 49% of survey respondents claim their CPOs have been at the forefront of acquiring, implementing, or adopting new technologies in the past year. CPOs are not only leading technology investments but also playing a pivotal role in negotiations.
A C-level risk management executive from a financial firm commends their CPO, stating that they have been "relentlessly working on developing digital know-how" and striking key deals.
Target Areas for Investment
When considering areas where investment would enhance efficiency and effectiveness, respondents point towards investments in digital transformation to reduce manual data entry (37%) and process orchestration across systems (27%).
These technological solutions cover a broad spectrum, from communication tools to automation solutions. Some CPOs are even spearheading the overall digital transformation within their organizations.
Overcoming Data Barriers
An intriguing aspect is the emphasis on overcoming data barriers. The respondents highlighted process orchestration across systems as an essential investment area, pointing to challenges like integrating with legacy systems and synchronizing data. These are vital steps to achieve efficiency across the company.
A significant 49% pinpoint manual data entry as one of the top challenges in evaluating supplier business practices, pointing towards automation as a vital technology investment.
CPOs as the Pioneers of 2023
CPOs are no longer confined to traditional procurement roles; they are emerging as head negotiators and technology leaders. Their focus on efficiency and cost reduction is intact, but a larger role in digital transformation is evident.
The mastery of soft skills like communication, coupled with technical knowledge, positions CPOs as formidable negotiators and key decision-makers. Their involvement in diverse areas like ESG initiatives shows their expansive leadership capacity.
Nearing the end of 2023, the evidence suggests that the role of CPOs will continue to evolve, with a relentless pursuit of digital transformation, technology adoption, data governance, and strategic supplier negotiations.
Procurement leaders are not just adapting to change; they are the harbingers of transformation, making digital evolution and process orchestration the essential areas of investment for the future.
Other articles in the series:
Part 1: Insights and Challenges
Part 2: High‑Level Decision‑Making
Part 3: Top Priorities in 2023
Part 4: ESG Monitoring and Reporting
