Purchasers told to grasp boardroom opportunity

20 October 2004
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21 October 2004 | David Arminas

Purchasers have an opportunity to step into a new top-level job called a chief relationship officer (CRO), sitting beside the chief information officer and chief financial officer.

The role is a direct response to the growing importance of relationship management as the competitive edge in the near future, according to Roger Camrass, executive director of Fujitsu Services in Europe.

In his keynote address to the conference, Camrass said companies needed a person with the right skills to manage these relationships that will in essence make up the greater corporate identity.

"Relationship management will be the new source of competition," he said.

But to lead on relationships, Camrass urged purchasers to leave their comfort zone of transactional procurement and show that they understand a company's business strategies.

In the new connected economy, technology was king and made transactional and tactical buying skills less important.

Tactical sourcing was easier and would soon be externalised and outsourced.

Purchasers now work in the era of third-generation outsourcing, Camrass said.

The first generation saw long-term 10-year contracts with little flexibility in delivery, such as the much criticised and now defunct EDS and Department for Work and Pensions IT deal. They were like "straitjackets" for suppliers and clients, he said.

Second-generation outsourcing had many more risk-and-reward clauses and contracts were sometimes for only two years or so. They demanded continuous improvement by suppliers and allowed for improving technology to deliver more the longer a contract ran for.

"Big companies will now blow apart and unbundle into different outsourced corporate elements," Camrass said. "Purchasers will speak in terms of asset swaps, mergers and equity shares."

But there was a downside to having a CRO, warned professor Paul Cousins, chairman of the conference and professor of operations management and head of supply chain research in the school of management at Queen's University, Belfast.

"The danger is that the CRO will become the sole person responsible for all relationships," he said.



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