CPOs are now expected to add value beyond cost and drive process improvement in order to remain competitive. Learn the three ways 2023 ProcureCon West encouraged leaders to meet this increased demand.
Last week, hundreds of procurement leaders gathered in San Diego for ProcureCon West 2023 with the goal of sharing best practices, collaborating, and discussing ways to overcome new challenges. The most striking thing about the event was how consistent the challenges and opportunities were for all attendees. The themes were very consistent and shared by almost every speaker in one way or another. What was also exciting is how prevalent supplier diversity was with most leaders. Here are the three very big themes we heard from procurement leaders this week:
Plan for more volatility
Let’s get the “bad” news out of the way. If you were hoping that 2023 would be different from the last 3 years, guess again. Most speakers and attendees are planning for continued or even more volatility. While the COVID pandemic seems to be mostly over, leaders continue to see challenges with inflation, economic pressure, political unrest, changing legislation, and more. Many speakers discussed this level of volatility as the “new normal” and few expected any changes soon. They also see diverse suppliers as a way to manage that volatility as they tend to be more responsive and agile.
There was even a riveting discussion about lessons learned from hyperinflation in South America featuring Joseph Martinez, retired Managing Director, CPO of BNY Mellon.
“CPOs need to watch inflation and monetary policy. It’s very possible that the current political gridlock in DC could spark more inflation in the US,” he asserts.
So don’t relax now.
The changing role of the CPO and Procurement
Another major theme presented was the changing role of the CPO and the procurement team. No surprise, there was unanimous agreement that gone are the days a CPO can report on cost only, and, and then go home. In addition to being aware of inflation, a CPO today needs to be connecting with the business directly, asking “How can I help?” and adding value well beyond cost.
“Whenever I meet with my business counterparts I’m always asking them what challenges they have and how can I help,” shared Eric Dulin, Procurement Director at Yum! Brands.
But this new role goes beyond just being helpful. Leading CPOs are reinventing the role, driving process improvement, and directly changing the way the company operates. They’re also spending more time with executive leadership.
“I’m always asking why do we do it this way and can we do it better,” shared Purvee Kondal, VP of Strategic Sourcing at Sephora.
“I spend a lot of time educating senior leadership on what procurement does and how we can add value beyond just cost. We can help with innovation, supplier diversity, ESG and more.”
Purvee went on to talk about her passion for supplier diversity and how it’s a key value procurement can bring beyond cost.
Data and Digital Transformation
And of course, we can’t talk about procurement today without also talking about data and digital transformation. With more volatility and a changing procurement role that needs to drive more value, data and digital transformation is the tool to get us there. Data and digital transformation came up in almost every session in one way or another. The thoughts were that data will help leaders plan and manage volatility, while digital transformation can provide the speed and agility for organizations to respond to the many unforeseen challenges we face.
Many speakers also discussed integration as the next big step in digital transformation, and emphasized supplier diversity as a key capability.
Overall, it was a great event and our team was inspired by every organization’s commitment to supplier diversity. In spite of all these challenges and changes, CPOs were very clear that supplier diversity is a critical part of their role now and they want to do it well.