A CPO or Chief Procurement Officer is the executive responsible for managing all the acquisition processes for the company. Typical acquisition programs involve managing the procurement of various resources such as utilities, construction parts, and tools and equipment among others. It also includes supply chain management and negotiation of prices and contracts.
The CPO is also responsible for the timely payments of vendors and suppliers along with ensuring timelines for deliveries. Some of the other roles of CPOs include accounting, asset and shipment tracking and management of the database. While not directly responsible for the maintenance of physical inventories and stocks, a CPO usually has authority over the current numbers and future predictions of demand and stock.
Growing importance of CPO in today’s business world
The role of a CPO is one that is often not given the due seriousness that it deserves while filling the executive roles. However, with the rise of modern technologies driving automation and adoption of software as a service (SaaS), the role of a CPO is more important than ever.
1) Rise of automation – Most of the physical and routine activities of industries are increasingly getting automated. This also involves tracking and delivery of services along with a bulk of the processes involved with inventory management. With such a drastic shift towards automation, coordination and data analysis become important. This is where the role of a CPO plays a vital part. The chief procurement officer can easily coordinate between the various automated systems to get live updates on dashboards.
2) Outsourcing of services – Emerging companies and organizations with lean-operating structures often outsource a majority of its processes and operational requirements. With outsourcing emerging as one of the most popular trends in the market, companies now need better coordination capabilities in order to generate output from all the stakeholders. The CPO is directly responsible for timely delivery of services from all the contractors along with ensuring adherence to the quality standards. The CPO is also directly responsible for ensuring that the proper company established regulations and protocols are followed during delivery of services.
3) Popularity of on-demand services – With the rise of the economy of the internet, the nature of demand generation has become incredibly dynamic. Most of the products and services today are ordered over the internet. This generates instant and varying demand according to which inventory needs to be calibrated. Managing the demand of the consumer and adjusting the inventory and timelines accordingly calls for special supervision. The CPO here can take charge and coordinate between the conversion of leads, delivery timelines and supply chain management.
4) Use of SaaS – Most of the industries today use a variety of software to manage and keep track of processes. Some of the key examples are ERP (enterprise resource planning), CRM (customer relationship management) and SCMS (supply chain management software). The use of such software platforms involves accurate report generation and timely update of databases. The CPO has constant access to all transactions and processes that are happening in the company. With the availability of live data, the CPO can keep the databases updated, so that the SaaS platforms can generate accurate and timely reports.
Qualities of a successful CPO
Whether handling the operations of a large multinational or a small local business, there are certain key qualities that every CPO must cultivate in order to excel at their roles. Some of the important qualities are mentioned below.
- Being a team player and coordinating with stakeholders
- Awareness of innovative and upcoming technologies
- Proper understanding and prioritization of company resources
- Insight into future operational trends
- Openness to gaining new knowledge and skills