In many ways, changing how business is done is already a fait accompli. Leading innovators have leveraged emerging technologies to dramatically change their business models and how they interact with their customers. Digital transformation is well advanced, and the same disruptive technologies that are driving this change are shifting the role and mission of the Chief Procurement Officer (CPO) as well. The CPO that understands how to answer the traditional foundational requirements of the business while successfully integrating the innovation and agility of the digital age is the one best poised for success.
Today, CPOs must deal with an alphabet soup of spend-reduction enablers, constantly looking for ways to improve return on investment and increase savings while achieving the goals of the business. Though goals associated with disruptive technologies may be aggressive, they are achievable with the right attention paid to data and quality analytics that deliver end-to-end visibility across the enterprise and meet the needs of disparate business units and employees. It’s the latter that can’t be emphasized enough. CPOs must invest in people and skill sets, not just the technology those people will use. If agility is the goal, people must be agile, too.
Cognitive computing will change the workplace for more than 100 million knowledge workers in the next decade, and the technical and cultural shifts associated with artificial intelligence (AI) will introduce an unprecedented evolution in business. Social media and mobility have begun to create this shift. The Internet of Things and cloud computing are creating a connected ecosystem bursting with potential for the companies and CPOs who know how to navigate it. But all of this progress depends heavily on data analytics and system integration.
Cloud computing is agile by definition, and the on-demand model of software as a service (SaaS) is leading the cloud revolution. Informed CPOs will embrace this truth. Many CPOs already are living the new paradigm, which is manifesting itself clearly in retail, finance and other customer-facing spheres, but also in the energy sector, in manufacturing and logistics.
Making the investment in-house for data and analytics capabilities and in partnerships with leading service providers that can supply the technological and integration know-how is the real recipe for success in creating an agile procurement organization. CPOs must understand the future is now and immerse themselves in mastering an environment—and the right tools—to create growth.
ISG works with procurement organizations to leverage technology for business benefit. Please contact me to discuss further.About the author
Mr. Furlong is a Partner at ISG and has over 25 years of experience in assisting companies transform their general and administrative functions including finance and accounting, human resources, and procurement. He has expertise in formulating strategies and designing alternative service delivery models (Global Business Services, shared services and outsourcing), transforming processes, driving organizational change, and implementing emerging technologies such as advanced analytics, mobile solutions, cognitive computing and cloud based solutions. Mr. Furlong leads ISG’s Business Advisory Services practice and serves on the Americas Leadership team.