Wolfgang Rauch, CPO at pharmaceutical firm Novartis, did not plan to go into procurement, and dreamed about becoming a chemist or a jet pilot.
But, while he was a commercial apprentice at a firm in Germany, several emergencies in the procurement department in one day led to him being asked to join the supply management team. This was the starting point of his career, which became a life-long passion.
Here he gives some advice that could help you in your career:
1. Stay relevant.
We all know that what got us to today will not get us into the future. This is the motto that continuously reminds me of one key question: how to stay relevant for the business as a function in three or five years from now? What we should focus on? With this in mind, we have launched the Procurement 2022 agenda under the theme of being bold and relevant for our business stakeholders.
We aim to continue being deeply integrated into the business, to have clear understanding of the business priorities and continuously play the role of the business’s strategic advisor, helping it in achieving its priorities and solving problems in all kinds of areas.
2. Become a business partner.
We’ve got the right skills and capabilities to become true business partners and to achieve the optimal agility of the team. Over the last three years we consolidated procurement as part of Novartis Business Services, leveraging skills and the scale of the organisation, building global category organisations and strategic centres in five locations all over the world.
One of the biggest success stories to share is that we do have a seat at the table on all functional and/or finance leadership teams and we have the ability to run programmes across the corporation that are sponsored by the executive committee and even have their direct involvement.
And we have created a culture where team members are not afraid, but are highly encouraged to say `no` to things and tasks that are not important for the business and our internal customers.
3. Focus on the right things.
I think that CPOs should focus on three major areas. First, they should drive a mindset of business partnering, sitting on functional leadership teams, understanding business imperatives and acting as strategic advisors.
The second aspect is making sure that the organisation works with the right external partners, who are able to bring not just productivity to the business, but are also capable of activating top line growth through innovation. Such relationships should have strategic plans that are co-owned and incentives to maximise results.
The third focus should be on partnering with the best external capabilities in areas where we may not be the experts.
CPOs are perfectly positioned to design and implement new operating models that can open new channels of innovation by collaborating with start-ups.
4. Understand the power of technology.
I think we are still early in the process of understanding the benefits digital will bring. One of the areas that I expect most benefits will come from is smart analytics, which will help generate insights into our spend data to drive best business decisions.
It also will make the buying process much more intuitive for the end users, where machines will find the right products you need to buy without too much effort from your side. Other areas, like end-to-end order to pay processes, can probably be automated to a large degree.
We could benefit in the area of third-party risk management, as digitalisation should allow us to automate a lot and benefit from being connected to the right data insights and create better visibility about what is happening in the outside world.
This CPO interview is part of a series from Swiss-based global procurement leaders, carried out by CIPS Switzerland. Switzerland is home to some of the most successful multi-national companies and NGOs. CIPS Switzerland offers best practice events, workshops and networking opportunities.
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