Someone has to take charge and lead your procurement department to success. A person who can take swift action on acquisitions and be decisive when it comes to handling logistical issues or bottlenecks is vital to any organization.
That’s the role of a chief procurement officer (CPO). A chief procurement officer should be analytical-minded and be ready to handle just about any procurement challenge the world throws their way. Here are five essential, must-have skills for being an efficient and productive chief procurement officer.
A CPO worth their salt should be able to lead a negotiation with grace and aplomb. Negotiation lies at the heart of a good contract. It’s not the same as negotiating better rates on your car payment or auto insurance premiums. It’s more about having the confidence and ability to get what you want for your organization while providing value to the supplier with whom you’re negotiating.
A good CPO should be able to approach a negotiation with a fair and equitable practice as well as avoid any kind of arrogant behavior. It’s not about beating an opponent in one regard or another. It’s about finding and establishing an agreement that will be mutually beneficial for all parties involved. A good CPO must be able to get results in this area without isolating potential suppliers, negotiating poor quality contracts, or misunderstanding all the variables at play.
Familiar With Technology
Technology is the engine that drives most businesses and industries today. Being familiar with procurement technology, various procure-to-pay procedures, and understanding how they all work together to create harmony is a significant part of a CPO’s role in the organization. Technology is the driving force for most procurement in P2P practices. Without a keen understanding of the technology itself, how it works, and how it integrates into the overall process can be very bad—especially for the person in charge of procurement! There’s no reason to dwell in the past or hang on to archaic methods of procurement.
Procurement technology is typically used for storage, data analysis/retrieval, payment operations, and all of the necessary processes involved in P2P. It behooves any potential or aspiring CPO to make a strong effort to not only understand the technology but to be familiar with it and be able to choose the types of tech their own company can use for their procurement needs.
Take A Data-driven Approach
If technology is the engine, data is the fuel that keeps an industry going. From spending data to logistical data, understanding, collecting, and analyzing the numbers is increasingly important. Data helps CPOs use technology to the company’s advantage. With the right numbers and data, it’s easier to make decisions, cut costs, and get a handle on all the myriad quirks of the global supply chain.
Furthermore, understanding the data empowers the members of the CPO’s team to talk to one another, perform productive spend analysis, and be as proactive as possible in the face of uncertainty. Indeed, taking a proactive strategic purchasing approach using data and cloud-based Enterprise management software means a CPO can successfully steer their company in the right direction now and into the future.
Strong Sense Of Risk Management
In any business venture, there are going to be risks. It’s an inherent part of doing business in any sector. With procurement and logistics, the risks manifest themselves in unique ways. A chief procurement officer should know how to spot, identify, and assess risks in a timely manner. Risk is just a natural part of doing business. In their role, a CPO must know what to look for and how to assess/manage potential risk.
Third-party risk, like that associated with suppliers, is but one aspect of a larger whole. A CPO should know which suppliers are the most critical, if there are any dedicated suppliers, and have a plan in case of supplier failure. Being able to respond and manage risk promptly and efficiently is a fantastic skill for anyone, but is a must-have for any Chief Procurement Officer.
Exceptional Communication and Decision-Making Skills
Communication is the key to everything. Without strong communication, deals fall apart and businesses fall into ruin. For someone with such a big responsibility to the organization, a CPO must have impeccable communication skills—and have a good feel for how to wield them effectively! If the CPO isn’t talking to the rest of his or her team, communicating effectively, and taking a hands-on managing style then there may be additional problems down the line.
Being able to communicate through the proper structures and chain of command is a big part of any organizational management role, but for a Chief Procurement Officer, it is perhaps the most vital skill to possess. No matter the industry or organization, a CPO who possesses strong skills is part of the recipe for broad success.