Why CPOs Must Communicate The Value Of Procurement

Andrew Bartolini and Matthew York

The job of the procurement officer (CPO) is much more “political” job now than it was 15, 10, or even 5 years ago. CPOs must lobby the C-suite for executive and budgetary support, align their department’s mission with that of the enterprise, and align their procurement staff with internal and external stakeholders.

Collectively and individually, this is no small feat. That is why communicating the procurement department’s value and performance to executives, key budget holders, and line-of-business leaders is a critical part of any CPO’s duties. According to the most recent CPO Rising report, 33% of procurement executives report that pressure to do this well has increased, up from 25% who cited it as a top pressure in the 2015 edition.

Let us take it from the top.

Executives

As stated in an earlier article in this series, CPO-executive engagement is critical not only for aligning procurement’s mission and goals with those of the enterprise, but also for communicating its value and performance. In fact, the two go hand-in-hand. CPOs need to regularly engage the executive team, specifically the CEO, CFO, and/or COO, with clearly defined value propositions based not only on realized and implemented savings, but also on other performance measurements, like contract compliance, risk mitigation, and faster, more efficient processes. There should be no mistaking what the CPO and his or her team brings to the table.

Key budget holders

Although executives are often budget holders, budgetary decisions are sometimes made by other figureheads, like boards of directors or an enterprise’s treasury department. Here, too, the CPO needs to put on a salesperson’s hat and “sell” procurement’s value and performance. Nothing sells success like prior success. And nothing reassures reluctant budget holders that their precious dollars will be well allocated like demonstrated, documented performance measures, realized/implemented savings, and projected ROI on desired investments.

Line-of-business leaders

Here, CPOs and their teams need to grease the operational wheels by demonstrating the value that they bring not only to the enterprise but also to their peers. Procurement can do so much more than purchasing, and yet so many enterprise stakeholders believe that they should just “stay in their lane.” Communicating procurement’s value and performance to line-of-business leaders, and then their subordinates, can help procurement overcome this institutionalized mindset that can be a roadblock to greater influence, efficiency, performance, and organizational change.

Final thoughts

Too often, perception is reality. The perception that procurement is nothing more than a back-office band of buyers can pervade despite the speed, efficiency, savings, compliance, and risk mitigation that they can and do deliver across the enterprise. If the CPO does not explicitly communicate the reality, the perception is allowed to persist. Executive support, capital investments, and stakeholder relationships can be jeopardized if the CPO is not vigilant and vocal. Thus, CPOs need to engage executives, budget holders, and their counterparts across the enterprise and clearly communicate the value – in all of its forms – that they and their team deliver. They need to be a passionate advocate for procurement at all levels of the enterprise and always drive their value proposition.

Get more insight into why CPOs must be master communicators with Ardent Partners’ CPO Rising 2016: The Art and Science of Procurement.

This article originally appeared on CPO Rising. Matthew York is a research analyst at Ardent Partners and editor of CPO Rising. Andrew Bartolini is the chief research officer at Ardent Partners. Follow Ardent Partners on Twitter.