Читать книгу Profit from Procurement - Jose Oliveira Valentede - Страница 20

A FinTech company founded two decades earlier had never professionalized its Procurement until two years ago, when they hired some consultants to strategically address their largest buckets of spend. The one-year program was a big success and, as a follow-on, the company decided to build capability inhouse by hiring a permanent CPO and a team around her. After one year, that Procurement team has made a valuable and recognizable contribution to de-risking the business plan, which had been put at risk due to a drop in revenues in a major business unit due to consumer trends.

In the early days of the first program, almost no one in the company had confidence that Procurement could deliver anything, but by now the value Procurement could bring in professionalizing supplier relationships and driving cost out was becoming clear to all.

I spoke to the CPO recently, after a year in the role, and she was pretty clear on where she wanted to go. She told me that, ultimately, she sees Procurement's biggest contribution as being in product development. With products that are driven almost entirely by technological advancements that happen very quickly in a market full of start-ups with very low barriers to entry, she believes Procurement is ideally placed to be the ones on top of where the next innovation is coming from and which suppliers to invest in.

Product managers in different functions do this role today but there is so much Procurement can contribute to this, she thinks. But while Procurement has driven significant cost benefits for a couple of years, there is more to be done on that front, and the business expects it. That is why, for the next year at least, cost remains her number one priority, albeit from a different angle. Her view is that a lot of the pre-contracting processes around spend visibility, contract renewals, sourcing process, and pipeline development are working well and are embedded in the organization to the extent that they will continue to deliver cost benefit with less attention from her team. She believes the biggest cost benefits to be had now are post-contract supplier management. And this is where the immediate focus of her team will be.

Cleverly, she also thinks that by proving her team's credentials in this area—gaining trust for managing some of the company's most critical supplier relationships—she will find it easier to position her function to support the product teams later and their work identifying the next innovation in the market. It's worth noting that this area would itself have been out of bounds just two years prior.

Procurement has earned the right to set up and join performance reviews with business-critical suppliers at this company through the analytics, change management, and commercial skills it has shown in the pre-contracting space.

So again, we have a CPO with a refreshingly realistic view of her starting point, who eventually will move the Procurement function further up the value chain to add yet more value to the business. Her priority now is continuing to earn the credibility to do that.