IBM’s latest survey has found that chief procurement officers (CPOs) at the highest performing companies focus on supplier innovation, stakeholder engagement and overall success to get the best out of their procurement teams.
The IBM 2014 CPO Study was taken by over 1,000 professionals at companies which were divided into high and low performers depending on revenue and profits growth. The top 10 percent are referred to as "role models" and the bottom 12 percent as “under performers”.
According to the report, “role models think about procurement in broader terms than their peers; they are more likely to embrace priorities that serve more strategic enterprise objectives; they seek to extend procurement’s high value through collaboration; and they adopt leading edge, procurement-related technologies and solutions to further simplify the mundane-but-important aspects of transaction support.”
The survey found that 38 percent of role models put supplier innovation as one of their top three priorities, 18 percent more than the under performers. Similarly 42 percent of role models said revenue growth and enhancing competitive advantage were the most important priorities for their procurement teams, compared to 28 percent of under performers.
Based on the findings, IBM suggested three ways that CPOs can make sure that their procurement teams are contributing successfully to the overall company performance. Finding and rectifying operation weakness, acting to embrace the enterprise agenda and adopting an innovative mind-set.
“CPOs need to make innovation a priority by leveraging procurement’s unique position in the enterprise. They should foster interactions with suppliers and customers so that external innovations from these sources are heard inside the company. Finally, they should continue to be the vanguards of leading-edge technologies and solutions for both procurement and for the company as a whole."