This is part 3 of our "CPO job description" series, which takes an in-depth look at the role of the chief procurement officer. Check out our last installment of the series here, which talked about some of the primary responsibilities of the CPO.
In this installment of our de-construction of the CPO job description series, we’ll take a detour from our process-focused responsibilities and touch on technology and the next CPO job responsibility.
Selection and management of sourcing and procurement systems
We’re obviously a little biased here at Spend Matters regarding the importance of technology in supporting procurement. The old adage of “technology is just a tool” is thankfully starting to fade. Yes, technology is “necessary, but not sufficient” in its own right, just like anything else.
But, since one of procurement’s strategic capabilities (perhaps the most important capability) is to provide supply market intelligence (and insight) to reduce risk and increase reward, you can’t have intelligence without information. And, if you want to manage information in a sea of data noise, you need good information technology (IT). Supply market intelligence is truly strategic in your core value chain, and therefore, a CPO must manage this strategic capability, well…strategically, and not just cede that IT strategy to the IT department and to big incumbent vendors (both of whom do not have goals inherently congruent with the CPO). So CPO’s, and their designated top-level IT person in procurement (you have one of those right?), need to develop a procurement information strategy and architecture that will allow them to stand up new capabilities as procurement itself evolves.
Most organizations are still too dependent on outdated systems (e.g., legacy systems, spreadsheets, PowerPoint, old ERP application versions, etc.), and a CPO must take a leaderships position in upgrading procurement’s technology portfolio to compete in the modern global age. Unfortunately, there may be little-to-no budget. IT may be driving the [ERP-only] technology selection process. And if you’re lucky, you may even have cloud-based niche systems to support some part of the process.
As such, the incoming CPO will be expected to find the elusive “long-term quick fix” and acquire industry leading best-of-breed functionality on a shoestring budget. The CPO will need to be savvy in drawing from a rich provider ecosystem in an XaaS world where technology can be acquired from multiple service provider types (e.g., BPOs, MSPs, etc.). The modern CPO will need to understand this supply mega-market particularly well since it has multiple overlapping segments that are constantly changing. Since there are hundreds of companies in this segment, the CPO can’t possibly be an expert in them, but at least must have some category intelligence on tap. This is especially true because, in this case, the key stakeholder of this spend category is the CPO! Therefore, the CPO must apply strategic sourcing best practices to this super-sized category, too!
To help the CPO make sense of this mega market, we will provide a condensed version of our provider almanac categories (and their descriptions) below to help provide some level of clarity. Each of the categories are hyperlinked to the almanac section of you want more details, and you can always use the category tags in our “tag cloud” to help you find the content you need (in addition to our site search functionality). If you can’t find what you are looking for, please drop us a line, and we’ll help you find it.
Here is the solution provider market taxonomy, and please stay tuned for future “solution maps” that will drill down into these individual segments…
- ERP Suites
- Contract [Lifecycle] Management
- Sourcing & Supplier Management
- Supplier [Lifecycle] Management
- Services Procurement
- Supply Chain
- Cost Management
- Trade Financing
- Supplier Networks & Platforms
- Data/Content Management
- Analytics and Market Intelligence
- Membership Organizations
It’s hopefully obvious to the CPO that technology is a critical resource and an enabler of procurement processes. In our next installment of this series, we’ll talk about perhaps the most critical responsibility for the CPO, which is to build, re-build and manage the procurement team.