A Review of CPO Rising 2017: Tools of the Trade
The CPO Rising 2017: Tools of the Trade report from Ardent Partners was a big focus last year. It was the first of their benchmark reports to explore the technology perspective of procurement, and it was revealing. Before the release of CPO Rising 2018: The Age of Intelligence happens, we thought it was worth reviewing Tools of the Trade to check some highlights. It’s also good to have a reminder of where procurement leaders stand in their efforts to achieve Process Under Management.
There were a host of insights in last year’s CPO Rising 2017 report, most surprising is that procurement leaders have an increasing interest in getting their Process Under Management, and less focus on spend under management. Not that procurement has reached peak spend or anything, but it may be a case that streamlining processes (through technology) is going to lead to better spend control, and many other benefits. Here are some highlights:
The leading strategy for CPOs in 2017 was to improve use of technology. Which makes sense especially considering the other top strategies: collaboration, communication, processes all benefit from a robust procurement solution integrated across other functions.
Procurement is always seeking to increase the value it adds to an organization, along with influence and impact. The most efficient way to do that in light of limited resources, is with the right P2P technology. As the report reveals, the list of priorities for CPOs in this year’s report puts Process over Savings – by a lot.
Procurement’s top challenges – in addition to sourcing and keeping the right talent – are a subset of similar bigger organizational issues. In the realm of procurement solutions, the biggest hurdle is lack of understanding around current processes. That is a critical part of planning and finding a new solution, not to mention implementation and measuring success KPIs.
Knowing what current procurement processes are, and how to improve or optimize them, is key to mapping over to new technology, achieving adoption and powering your way to ROI. As we touched on in other blogs, budget constraints can often be at least partially solved through creating a “shared benefits” strategy with other departments. Again, in the planning stage that involves getting buy-in from stakeholders with a “what’s in it for them” approach – something particularly effective for collaborating with finance and legal teams.
Procurement performance is part and parcel with the points above, the whole issue of collaboration and alignment across organizations. As the report states, procurement doesn’t operate in a vacuum. Aligning procurement’s goals with the those of the bigger operation is necessary to achieve success and increase influence. It all comes down to continuously showing the value add of a fine-tuned procurement process machine. Naturally, that is going to require technology to attain the efficiency, streamlining, collaboration and integration to make it all work.
With the right P2P solution in place – ideally, integrated with supplier management and contract lifecycle management (CLM) – what can be accomplished is significant. As the diagram shows, getting it right means big-to-huge results. Results that can be used to further procurement’s influence.
The upshot of CPO Rising 2017: Tools of the Trade was, and is, for procurement to reach its full potential embracing technology is not an option. Scalability, agility, flexibility and easy adoption are more than just the factors the will determine a procurement solution’s success, they’re what will accelerate procurement itself.
But complete automation from source to settle is an ultimate goal; how it is reached won’t happen all at once. It has to be done in stages, combining stakeholder buy-in with a change management strategy to ensure full adoption. Control the TCO, bring processes under management and achieve ROI. Then move on to the next stage.
In addition to downloading the complete CPO Rising 2017: Tools of the Trade report, be sure to watch our on-demand webinar with Andrew Bartolini, Managing Partner and Chief Research Officer of Ardent Partners, and Greg Tennyson, CPO of VSP Global. If you’d like to see how a modular solution approach on the Determine Cloud Platform will help retool your procurement organization to get its Process Under Management, schedule a personalized demonstration.
All charts ©Ardent Partners – 2017