Four insights from CPO Rising 2018: The Age of Intelligence report
For any professional in procurement or even the wider source-to-pay universe, the release of the annual CPO Rising report is an anticipated event. This year, Determine created two separate webinars around the research: an overview on unlocking data value, and a deeper dive into how CPOs will be leveraging connected smart platforms to increase intelligence. As the report states, over the next few years a new type of procurement intelligence is going to enable CPOs to view their businesses differently and force them to manage it differently .
Due to the rise of business process automation tools, cloud-based applications, mobile solutions, connected devices, and Big Data permeating the modern business environment, more data is being created each year than ever before. The result is a world that has become increasingly data- driven, and businesses around the globe have an extraordinary opportunity to capitalize on it. In 2018, businesses and consumers are now fully-engulfed by technology and the data it both creates and captures.”
The quote above, from the introduction to the CPO Rising 2018 report, encapsulates much of what’s on the minds of global CPOs and senior leadership in general. This year the Ardent Partners team surveyed an unprecedented 324 executives from around the world, and what they’re thinking about is data and how to leverage it. That is probably why “Improve Use of Technology” is the number one strategy for CPOs in 2018; turning that data into intelligence is what will revolutionized the future of procurement (and management), and those who learn to harness it best will reap the benefits.
Since the report insights are revealing and compelling on their own, what follows are samples from each chapter.
CPO Rising 2018 Chapter One: The State of the CPO
In 2018, in a move that is aligned with the general embrace of technology by business over the past few years, more CPOs (47%) are focused on improving their department’s use of technology by investing in new systems and improving the use of their current systems than any other specific strategy. As older technology-resistant staffers are replaced by a new generation of tech natives, CPOs are creating a tech-friendly (and driven) environment and mindset. They are investing in solutions to support an expansion of duties — while maintaining a flat-to-down headcount — to scale talent, expertise, and best practices, and to improve visibility and compliance.
CPOs also understand that procurement is a dynamic process that continuously needs to be modified and optimized to align with the evolving needs of the organization. That means technology is also a critical enabler of more agile processes. Building a culture of Intelligent Procurement must be pursued across multiple areas, but leveraging process automation and knowledge capture tools is one clear way to ensure that that intelligence is accessible and scalable across the enterprise .
CPO Rising 2018 Chapter Two: The State of Procurement
The concept of Intelligent Procurement is not dependent upon a single technology, process or strategy, but requires an ecosystem of interconnected and interdependent plans, solutions, and innovations (the subject of our webinar with leading smart platform partner Tradeshift and Ardent Partners) where the whole is a whole lot more than just the sum of the parts. Whether you believe Intelligent Procurement is more of an evolutionary, iterative process, or one that can just be created en masse and plonked down by buying the right technology and hiring the right people (in truth it both of those things), top CPOs are working to make it a reality.
Along with having a right-minded talent base, stakeholders on board and a map of strategic processes, procurement needs to aim toward digital transformation via intelligent business technologies. These include advanced/Big Data analytics, AI (artificial intelligence and/or augmented intelligence), augmented reality (AR), Blockchain, chat bots / virtual assistants, IoT, machine learning, natural language processing (NLP), and robotic process automation (RPA).
Intelligent Procurement teams are tapping the enormous potential in these tools to achieve greater agility, speed and versatility, and generate greater business value. Connected smart platforms can accelerate and simplify that transition.
CPO Rising 2018 Chapter Three: Procurement Performance
Procurement is gaining enterprise influence precisely because it sits in a more focalized position than ever. With the dawn of “smart” procurement this longstanding and strategic enterprise unit will expand its reach and influence even more through intelligence and operational prowess. So how is that measured? With spend under management targets flat and savings down (two BIG missed opportunities that aren’t all that out of reach — just run your numbers), areas like supplier enablement through technology and enterprise goal alignment are on the rise in best-in-class organizations.
In 2018, the alignment between procurement and greater organizational objectives is not only more achievable than ever, but more imperative. The intelligence that flows through procurement is ripe to be leveraged for more strategic enterprise activity, and best-in-class enterprises are more than twice as likely to establish that alignment. In this way, procurement’s role and influence not only grows, but is on full display. And because business is dynamic and ever-changing, those Intelligent Procurement teams that are also agile will continue to increase their advantages.
CPO Rising 2018 Chapter Four: Strategies for Success
As always, Ardent Partners sums up their CPO Rising report with a long list of ways to begin or continue improving procurement performance. Some are more in the “marathon” spectrum while others are achievable in a sprint, but the critical point is that a plan is in place and steps are taken to accomplish it. Some highlights of their suggestions:
- Make technology adoption a priority and mandate its use.
- Identify legacy platforms that can be enhanced or replaced.
- Invest in technology to automate core processes.
- Focus on developing a proactive and agile operation.
- Develop a plan with specific metrics to improve spend management.
Experience a deep dive into all the insights available in CPO Rising 2018: The Age of Intelligence and register for our webinar with our smart platform partner Tradeshift and leading analyst Ardent Partners.
To see how innovative technology can increase your intelligent procurement capabilities, schedule a personalized, no-obligation demonstration of our modular solutions on the Determine Cloud Platform.