Best procurement teams prioritise supplier innovation and stakeholder engagement

Will Green is news editor of Supply Management
15 December 2014

CPOs at top performing companies differ from their less successful peers in the way they focus on overall enterprise success, engage with stakeholders and embrace progressive procurement practices, according to a global study.

The IBM 2014 CPO Study surveyed 1,023 CPOs at organisations that were divided based on revenue and profits growth into the top 10 per cent, bottom 12 per cent and the remainder, to understand the values driving “role models” as opposed to “underperformers”.

The report said: “Role models think about procurement in broader terms than their peers; they are more likely to embrace priorities that serve more strategic enterprise objectives; they seek to extend procurement’s high value through collaboration; and they adopt leading edge, procurement-related technologies and solutions to further simplify the mundane-but-important aspects of transaction support.”

According to the survey 38 per cent of role models put introducing supplier innovation among their top three priorities, compared to 20 per cent of underperformers. Some 42 per cent of role models put revenue growth and increased competitive advantage in their top three, against 28 per cent of underperformers.

While 94 per cent of role models believed procurement is “effectively hearing the voice of the end customer”, just 74 per cent of underperformers did so, and 62 per cent of role models “broker new relationships with suppliers that introduce new ideas and innovative thinking”, against a third of underperformers.

The report recommends CPOs “find and rectify operational weakness”, “act to embrace the enterprise agenda” and “adopt an innovation mindset”.

“The most advanced CPOs are proving that focusing on the nuts and bolts of procurement processes is not enough to bring real value to the business,” said Terrence Curley, director of strategic supply management at IBM.

“True procurement leaders who see the bigger picture can use their unique vantage point in the organisation to drive innovation, grow revenues and expand competitive advantage.”

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