Webinar Notes: Empowering the CPO Through Data
In this week’s webinar notes we’ll feature two webinars that addressed the idea of empowering CPOs through data or business intelligence: ISM with the Aberdeen Group and IASTA with Forrester Research.
Both events addressed the need for procurement to have sufficient analytical capabilities to support the CPO’s efforts to develop strategies for improvement and risk mitigation, and acknowledge that even the best analytics are not actionable without external benchmarks. As a result, best-in-class companies are making investments in the technology solutions and services needed to improve procurement’s capabilities.
Spend analysis solutions are a mainstay for many purchasing/procurement organizations, but business intelligence (BI) solutions may be a new type investment. As useful as data is, it is the conclusions drawn from it that allow a company to act in response to their own historical patterns and forecasted demand. Both of this week’s are available on demand using the links below – I encourage you to listen to one or both of them if your organization is considering the implementation of a BI solution.
Having the opportunity to listen to two events on essentially the same topic in a 48-hour period gave me the opportunity to listen for the unique and interesting points in each. The focus of the content was different, as were the reports that each event was based on. Below is my primary take away from each of the events. If you happened to attend one or the other, log in to share your own take-aways.
ISM and Aberdeen Group
As always, CPOs continue to be driven by the need to increase savings and cut costs. In addition, they are placing a particular emphasis on improving the connections between procurement’s strategy and overall organizational objectives. This might sound like procurement needs to have those objectives in hand before finalizing a strategy that will be accepted and approved of by executive leaders. But while there will always be external, market driven influences on a company’s objectives, the data CPOs have at hand should be factors in the development of objectives as well. In this case, enabling the CPO translates to enabling the CPO to contribute at the highest levels of strategy development. This requires good data and actionable conclusions – ideally tied to the external benchmarks that we have already acknowledged are so important. Rather than being a linear process, procurement’s involvement in organizational objectives development and execution should be cyclical: contributing first when the objectives are being determined and prioritized, then again when the execution plans (which certainly include opportunities for savings and cost reduction) are put in place.
IASTA and Forrester Research
As CPOs and the contribution that procurement may make to the organization become clearer, we come into increased contact with new groups and executives – finance, operations, etc. As the level of our stakeholders rises, so do their expectations of us. Having higher expectations also means having a greater opportunity to impact the business. Governance becomes more important and as a result needs to become more formalized. We are all familiar with the need for champions in the organization to spread word of our successes and smooth out interactions with ‘sacred cow’ groups. Those executives should be formally named and participate in regular meetings: weekly, monthly, quarterly, annually – based on the level of the executive and how involved they have needed to be in procurement’s efforts. An additional governance component that is just as important is an escalation path for handling roadblocks, slowdowns, and decision making challenges. As we prepare to start a new calendar year, bringing the official champions together to have a role in drafting that escalation path is a good opportunity for buy-in and proactive engagement with these important team members.