New Research! Changing Roles of the Procurement Leader: The Analytical CPO

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We often say that our colleague Peter Smith, the Managing Director of Spend Matters UK/Europe, has a tendency to write the occasional superficial paper that becomes the most heavily trafficked and downloaded freebie in our portfolio – simply because its appeal is so universal, and the title and abstract so catchy. But in the case of our latest free research paper, Changing Roles of the Procurement Leader: The Analytical CPO, Mr. Smith has truly outdone himself, authoring a paper – really a personally astute and clever essay – that will prove timeless. We believe it should be required reading for procurement leaders and newbies alike.

Peter begins his analysis by framing the case for the analytical CPO:

The business world constantly changes, so procurement leaders have to change with it. While much of the recent focus has been on the need for procurement professionals to develop strong interpersonal skills, we’ve been observing another trend that is driving somewhat different needs.

To succeed now, a procurement leader must also be increasingly analytical and data-driven, making decisions and setting direction based on evidence and analysis, not just personal judgement. This doesn’t mean there’s no room for sound judgement, or honed skills such as negotiation, but in
this paper we will explain why tomorrow’s procurement leader will also need to have impressive analytical skills – ideally personally, or (as a minimum) at their disposal to support their work.

We set the scene by describing why analysis is now at the heart of much procurement activity, and briefly describe seven key areas where it is essential to achieve success. We then get into the skills and capabilities that will be needed, and finally suggest how procurement leaders can try to ensure they are successful in this new environment.

How will CPOs succeed in the analytical age? They’ll need a lot of different skills, that’s for sure. To wit:

When we look at the range of skills needed to be a successful CPO, it is a daunting list. They need to be good managers if they’re running professional teams. They need to be persuasive, with a strong ability to influence and negotiate. There are times when a sense of deal-making is useful. Yet at other times, more considered judgement is necessary and a note of caution can be useful.

And the needs constantly change. Until recently, procurement was heavily based on process management, negotiation, and some fairly basic numerical analysis. However, in recent years procurement leaders have had to adapt and acquire new skills, particularly as the role of technology has vastly increased in every professional role, including procurement.

Peter goes on to explore and flesh out where and how analytical skills must be applied, including sections on the following:

  • Spend analytics
  • Market analysis
  • Negotiation
  • Sourcing and supplier selection
  • Collaborative/market informed sourcing
  • Performance and contract management
  • Risk management

Then he explores the capabilities that are going to be needed most at the top of the procurement management ranks. The paper concludes with actions and recommendations for senior and rising procurement team members alike to improve their analytical lot (hint: some people just won’t cut it unless they remake their quantitative and analytical selves).

We’re thrilled that Peter has taken the time to step back from his usual coverage of the procurement market in order to provide such a personal and expert look at how procurement leaders – CPOs, VPs, and Directors alike – will need a new analytical orientation to succeed. And we’re also grateful to BravoSolution for underwriting temporary access to this research as well. We encourage you to download Changing Roles of the Procurement Leader: The Analytical CPO as soon as possible, as we’ll be putting this in our subscriber-only research library in the coming months.

Voices (2)

  1. Pierre Mitchell:

    This is a great paper. Well done Peter. I was talking to a CPO at a mega CPG firm and I liked his portrayal of Procurement as the “Analytical Conscience” of the organization. ALL procurement professionals must be both analytical AND action oriented. For example, DON’T do stakeholder surveys or supplier surveys if you are only going to analyze the results but do nothing with them. That will definitely set you back with these key stakeholders.

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