THE RISE OF PROCUREMENT’S CHIEF VALUE OFFICER
Procurement has been an important business practice for over a century, but that doesn’t mean it’s a settled field. Quite the opposite: new innovations in technology and business culture require procurement departments to keep pace and prepare for impending change.
Today, we’re in the moneyball era of procurement, where data-driven insight is everything, and new technologies are being constantly developed to make that insight as immediate and transformative as possible. We aspire to optimize our procurement by leveraging data to anticipate needs in our supply chains more proactively. Procurement officers must start envisioning themselves as “value officers,” a broader term that underlines just what drives this work in the first place.
As procurement roles and responsibilities continue to evolve, what does the future look like in the coming years? There are five trends developing within this era of procurement that teams must embrace to stay at the front of the pack. Some of these trends are simply new realities in age-old practices, while others are on the horizon.
It’s no secret that the obsession over data analysis has transformed business (and society) from the top down, and procurement has not been immune. In the most basic sense, procurement helps the organization ensure that expenditures are optimized for value and aligned with objectives of the organization. The performance of many CPOs is measured against their ability to generate cost savings, and finance departments and C-suite executives have more tools than ever before to scrutinize those savings.
Luckily, procurement departments can exploit these same tools as well.
How can you tell if there is a particularly volatile or uncertain link in your supply chain, or a market that you’re not reaching as quickly as you’d like? Predictive analytics can help you find the answers to these questions before they become real problems – providing a confirmation of trends and beliefs rooted in statistics – but you have to be creative and proactive in order to know which questions are most urgent to ask based on the data at your fingertips, and curious enough to know which questions to ask. By practicing strategic sourcing, organizations can ensure they’re generating the most value in all aspects of purchasing.
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