After the financial crisis of 2008, companies started to focus on improving their overall value creation to survive the demanding market and economic situation. Unfortunately, with stakeholder pressure to deliver growth and profits in the short term, many companies lost sight of their long-term strategic goals and long-term investments. As a result, these companies forgot to reinvent themselves and remain relevant in this ever-changing market. We’re just transitioning out of another global crisis. So, it is vital that the focus of CPOs and other C-level executives not be restricted to just fire-fighting and shoring up the bottom line.
As the complexity of operating in today’s challenging fiscal climate escalates, CPOs need to play critical roles beyond their usual remit of ‘cost-containment’ and deliver real added value to an organization. CPOs can stand out and deliver value by leveraging technology and making smarter choices despite increasingly tight margins, ineffective approaches, and outdated techniques.
Here are 5 things CPOs can do for you and your organization
1. Reduce supply risk
Companies rely on complex, multi-faceted, interconnected networks that make up their supply chain. Organizations leveraging cost savings by expanding their geographic presence and sourcing worldwide incur risk. According to McKinsey, every 3.7 years, there will be an event that causes a supply chain disruption for at least a month. Pandemics, ships stuck in canals, natural disasters, and more are becoming commonplace.
A CPO armed with a best-in-class risk radar and AI-led risk management software can manage and mitigate risks to soften the blow on your organization from these force majeure events. In addition, they can ensure the resilience of the organization’s supply chain and ensure the availability of resources, especially at key points in time.
2. Become a strategic advisor to the business
CPOs need to see the big picture and understand how their decisions impact the bottom line. They are in a unique position to identify and recommend solutions to organization-wide and departmental bottlenecks if there exists a platform and culture of collaboration.
They can provide business insights and recommendations in association with your organization’s Product Development Team with their experience and acumen and consult on where the company should focus its resources to get the most bang for its buck.
3. Improve processes and efficiency
CPOs have the potential to improve processes and efficiency across the company. They can identify redundancies and inefficiencies and make recommendations on how to streamline things. They need to be freed of operational and routine activities to be able to dedicate their time to more strategic and tactical activities. In addition, identifying and fixing bottlenecks in workflows will be much easier and more intuitive with an AI-led solution.
While it may seem like a lofty goal with abstract objectives, several organizations have empowered their CPOs with solutions that help measure the increase in efficiency and performance, with metrics such as the supply chain cycle times, on-time delivery, et al.
4. Manage costs and maximize innovation of new technologies
As your company grows and expands, it will inevitably invest in new technologies. CPOs need to be at the forefront of leveraging new technologies to improve procurement & other processes. They should be advising the business on how to integrate new technologies into the organization best. They need to ensure that these investments are made wisely and that the costs of these new technologies are managed effectively.
5. Enable corporate sustainability
ESG (Environmental, Social, and Governance) is a facet of business that is important right now, and rightly so. Consumers are increasingly interested in the companies they do business with and how they impact their communities and the environment. Global governmental bodies & ESG watchdogs are committed to ensuring that organizations
- do not negatively impact the environment
- uphold social and diversity & inclusion initiatives
- adhere to international conventions and agreements
A CPO that can help your company focus on ESG initiatives can improve your reputation and save you money down the line.
The Bottom Line
This isn’t to say that all procurement tasks have to be completely reinvented in the coming years—it just means that CPOs should be strategic about investing their time and resources. It’s essential to keep your eyes focused on the future and the products and services to help you win. In other words, don’t starve innovations that could significantly change your business’s value proposition because they might be the thing that puts you a step above your competitors.
We at Zycus have always believed that CPOs have the potential to do more with less. Zycus solutions are comprehensive and developed to consistently provide superior functionality and user experience across our modules. This commitment of ours implies that we do not just offer ‘each of our modules’ but also offer them ‘in their most advanced form.’ Our proprietary Merlin AI ‘speaks to’ all modules integrated with it, leading to Zycus’ P2P suite being the only one-stop solution you’ll need.
Visit zycus.com to help your CPOs do #MoreWithLess.
