Gone are the days when Chief Procurement Officers only managed day-to-day procurement activities; CPOs are now strategic power players in their organisations. They are responsible for developing long-term partnerships with key suppliers, managing risks, driving innovation and digital transformation, and being a valuable asset to the company’s overall strategy.
At least, that’s what the current landscape demands of them. But if you want your CPO to achieve their potential of ultimate deal-maker, they’ll need a little help from their digital friends.
3 New Responsibilities for CPOs
- Risk management. At first glance, this portfolio seems like it has always fallen under the CPO’s umbrella. But a Deloitte study revealed the surprising truth that only 18% were actively tracking the risks posed by first tier suppliers. With increasing global instability due to crises like the Russia-Ukraine War, more frequent and potent natural disasters, and ever-present trade wars, CPOs need to be aware of and planning for the major risks threatening their supply chains. A stable and agile supply chain is their responsibility.
- ESG initiatives. Tighter government regulations and an increasing awareness among consumers have made sustainability a top priority for every business. This, too, is about supplier risk, as consumers have no problem holding businesses to account for the practices of their suppliers. CPOs simply have to be aware of what’s going on in their own backyard, and how their suppliers are manufacturing their products or providing their services. It’s not about price anymore; consumers are willing to pay more and put up with longer delivery times if they know what they’re buying is ethical.
- Communication. One of the reasons why organisations are turning to CPOs for strategy and innovation is their birds-eye view of business. As procurement leaders, they need to be in constant contact with all departments and stakeholders; they know where the risks lie, who has what priorities and where the best and most achievable opportunities for innovation exist. But to forge the sort of relationships needed to bring all this together, CPOs need to be brilliant communicators and leaders, capable of bringing a diverse group of people together and unifying them for the good of the company.
How modern AI can unleash a CPO’s potential
Time. Most things can be achieved with enough of it, and it’s precisely what modern AI and machine learning can provide.
For CPOs to deliver the strategic solutions businesses require, they need to devote less time to day-to-day transactional activities. Some research has shown that the leading performers in the role of CPO spend 15% less time on these activities than their counterparts. That’s 15% more time spent on driving strategy and innovation.
AI and machine learning can help CPOs find this extra time. Here’s how:
- RPAs. Robotic processing automation is the data entry grunt every business needs. The basic tasks that RPAs can perform are currently taking up too much human time. Not only that, but we’re poor at repetitive mind-numbing tasks, and computers are literally built for it. It’s horses for courses; put workers where they can do the most good, be they digital or human.
- Risk Management. AI and machine learning can be used to identify and assess risks in the supply chain, such as natural disasters, geopolitical instability, and supply chain disruptions – and it can do it with far greater efficiency and accuracy than a human. This can help CPOs to quickly identify potential risks and develop strategies to mitigate them.
- Supplier Management. AI-powered tools can be used to automate the process of identifying and evaluating potential suppliers, helping CPOs to quickly identify the best options for the company. Machine learning algorithms can also be used to monitor supplier performance over time and identify areas for improvement.
- Contract Management. AI-powered tools can be used to automate the process of managing contracts, including creating, signing, and monitoring compliance. This can help CPOs to streamline their processes and ensure that all contracts are up-to-date and in compliance with company policies.
Use AI to transform your CPO’s output
At Comprara, we’ve been assisting and guiding businesses and organisations through the process of adopting new and powerful digital technologies. We know what procurement officers need to realise their potential, and we can provide transformative AI solutions. Get in touch today.