Procurement outsourcing (part 4) – the new role of the CPO

In the previous parts of this series, we’ve looked at procurement outsourcing and described how we see two strong trends – towards the tailoring of services, and towards a much greater range of options that could be considered “outsourcing”.

So to finish, today we’ll just very briefly describe how we think this might be fundamentally changing the nature of the Procurement Director / CPO role. We’ve been thinking and writing about this for a White Paper, so we’re just flagging this here  - more to follow we hope in the Paper.  And don’t for a moment think we are advocating mass outsourcing of procurement – indeed, working out what to retain internally is perhaps the most vital element of this.

But nonetheless, our hypothesis says that we now have many, many different outsourcing options – from outsourcing at a category level, elements or all of the P2P process, and specialist activities and tasks from supplier information management to staff competence assessment to optimisation exercises. And we can tailor these options into a package that meets our needs, operationally and commercially.

So managing this whole process must now be a vitally important role for the CPO. And doing so to gain the best possible outcomes for the organisation sounds like a key competitive differentiator, and something that CPOs should be thinking about very seriously.  Life as a head of function is no longer about just managing a large team of internal people, with the odd bit of bought-in training or software (as it was when I was a CPO through the 1990s.)

Putting it simply:

How do you combine internal and external provision of services most effectively to maximise the contribution the procurement function can make to your organisation?

We suggest that this is one of the most important questions and issues for CPOs for the next decade. Simple as that.

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