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Webinar Notes: Learn Why Top CPOs are Guardians of the Bottom Line
This week’s featured event was hosted by Sourcing Interests Group and presented by IBM's Institute for Business Value or IBV. IBM just released the largest, most comprehensive Chief Procurement Officer Study ever conducted, with participation from 1,128 CPOs from organizations with annual revenue in excess of US$1 billion.
The report, "Chief Procurement Officer Study: Improving Competitive Advantage Through Procurement Excellence” is available for download from IBM’s site.
As I discussed in a post earlier this week (Are You Elastic Enough to be a Top Performer?) the study found that there are three points of differentiation for high-performing procurement organizations:
- Effective execution of traditional procurement capabilities,
- Influence within the enterprise over purchasing and strategic decisions, and
- The identification of innovative ideas from a diverse range of inputs.
Since we can all read the report for ourselves, I was most interested to hear the additional commentary in the webinar from report author Steve Peterson. Here are the comments that I found the most interesting:
The industries represented in the study were diverse, although healthcare and government agencies may have been under-represented. There were many respondents from the automotive industry and packaged goods companies. IBV saw an even distribution of industries across the levels of performance and maturity, with no industries showing advanced performance across the board.
Since the study was based on self-evaluation, there may have been some overestimation of current performance by the emerging performers based on a lack of understanding of the effort required to achieve excellence. For instance, in an assessment of analytics capabilities, emerging performers and top performers scored very close in categories such as data quality and room for improvement.
Procurement organizations need to become more agile in order to continue creating value. The best way to do this, according to a brief panel discussion at the end of the webinar, is to work in alignment with internal customer teams. The top performers need to save money but also help drive the strategic direction of the company.
Talent management was an expected concern for all survey participants. Skills development and retention emerged as priorities, but top performers differentiated themselves by having a clear purpose for the training and building of seniority – in most cases focusing on risk management and analytics. They also recognize that not all members of the procurement organization need the same training, allowing some members to specialize or receive focused training while others focus on fundamentals.