Autumn, May 2015

Five reasons it’s not really lonely top

CPOs discover shared challenges, common goals

During the first session of the The Faculty Roundtable National CPO Meeting, Networks Director Max Goonan asked members to share their greatest challenges for the financial year ahead. The catch is that they weren’t then asked to share these directly with the group, but rather to discuss their challenges with the member sitting next to them and then report on that person’s opportunities. This leads to some interesting match-ups: a CPO from the mining sector reported on challenges in telecommunication procurement, and a financial services CPO listed the opportunities in the FMCG space.

As the discussion progressed, a number of key cross-sector challenges became apparent across the group. As each issue was discussed, members spoke up about what had or hadn’t worked in their organisations and surprising similarities could be found across sectors. Below is a summary of the shared challenges outlined by the CPO’s involved in the discussion.

1. Finding procurement’s role in a downturn

•  Balancing cost reduction with sustainability; ensuring that the organisation isn’t crippled in the longer term
•  Reducing costs through efficiencies, integration and scale
•  Taking advantage of procurement’s higher profile during a downturn
•  Managing huge cuts in capital spend and bigger debts than cash
•  Making hard decision when you’re unable to keep on more than one supplier
•  Recognising the cyclical nature of downturns and having a plan for when business improves
•  Understanding that continually squeezing suppliers is unsustainable and harmful to quality.

2. Managing change

•  Positioning procurement to lead the organisation through change
•  Using change to drive momentum and reinvigorate the team
•  Adapting to changing or non-traditional business models
•  Managing industry and digital disruptors.

3. Creating senior buy-in

•  Ensuring that the right visibility is available at the executive level to guarantee the business understands the value procurement brings to the organisation 
•  procurement brings to the organisation
•  Convincing the business to invest in longer-term strategic priorities
•  Winning senior support to drive savings and bring in opportunities
•  Having clear, mandated procurement targets from the top
•  Taking the organisation with you on procurement’s journey
•  Quickly getting new business cases up and running.

4. Staying relevant

•  Improving procurement’s brand
•  Focusing beyond governance to add value and drive commercial advantage
•  Moving into the next phase of growth – what’s next for procurement?
•  Finding the best strategic model for your operation
•  Being accountable and celebrating successes
•  Transitioning from finding bottom-line savings to driving top-line growth
•  Working closer with sales organisations as a trusted commercial advisor
•  Positioning procurement as a problem-solver.

5. Winning the War for Talent

•  Building the skillsets for negotiating, influencing and managing difficult stakeholders
•  Creating a venture capital culture
•  Driving commercial leadership in the procurement team
•  On-boarding new talent and managing different capability levels in the team
•  Being open to advice to enable innovation
•  Improving the brand to attract great talent.

Of course, there were industry-specific challenges highlighted as well, and it was an eye-opener to see just how different the role of the CPO can be across different sectors. However, the critical challenges facing CPOs and the procurement function appear to be universal – the role of procurement, managing change, creating senior buy-in, staying relevant and building a talented team. These are not topics that are going to be “solved” by any single CPO, but the Faculty Roundtable session did enable members to access exciting new ideas to help reinvigorate their teams, rebrand their functions and rethink their approach to these shared challenges.

To learn more about The Faculty Roundtable, contact Networks Director Max Goonan via email.