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Effective procurement yields enterprise success, study finds

Posted: 20 Jan 2015     Print Version  Bookmark and Share

Keywords:IBM  purchasing  CPO  procurement  competitive advantage 

After going over the results of the latest survey from IBM, it is safe to say that the notion of purchasing being entirely a cost activity is completely outdated. In fact, the purchasing function now serves as another essential role to contribute value to the organisation. However, chief procurement officers (CPOs) who want a more active participation in the decision-making process need to put strong fundamentals in place in order to do so.

"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," noted Terrence Curley, director, 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."

Conducted by the IBM Institute of Business Value (IBV), the Chief Procurement Officer Study found that the most successful procurement organisations share several features including: (1) A focus on improving enterprise success, not just procurement performance; (2) Engagement with stakeholders to understand and anticipate their needs and values; (3) Service as a conduit for innovation from strategic partners, customers and suppliers; and (4) Willingness to adopt progressive procurement practices and data-driven tools to drive results.

Bring value to the enterprise through purchasing

Bring value to the enterprise through purchasing

Bring value to the enterprise through purchasing

Using these approaches, top procurement organisations are nearly twice as likely to introduce innovations into the company and 1.5 times more likely to influence senior leadership in decision around entering new markets, the survey found. The CPO garnered the feedback of more than 1,000 top procurement leaders from $1 billion companies across 41 countries.

Any electronics CPO can help move business forward for their organisations using these strategies.

- Hailey Lynne McKeefry
  EBN





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