May 03, 2023 | Procurement Strategy
Among the 2023 ProcureCon CPO report’s findings – the growing importance of source-to-pay (S2P), 81% of survey respondents indicated that enhancing the speed and efficiency of S2P activities was a high priority over the next 12 months.
Reducing operational costs came in only slightly behind in importance at 71%.
As the report notes, procurement leaders can achieve both of these priorities with a combination of technology implementation, contract negotiations and supplier optimization. Many companies will likely either be deploying new S2P solutions or looking to optimize their systems already in place.
This blog will look at how each of these three approaches can aid CPOs in achieving their most crucial priorities this year.
Modern procurement software has revolutionized the way procurement departments manage source-to-pay activities. These platforms offer a range of digital tools that enable CPOs to streamline processes, making them quicker and more efficient.
With advanced features such as automated workflows, online collaboration and real-time analytics, procurement platforms eliminate manual processes and reduce the risk of errors. This ensures that procurement teams can focus on more strategic activities such as supplier management and innovation.
Moreover, these platforms provide greater visibility into the procurement process, enabling CPOs to make data-driven decisions and optimize spend.
By reducing operational costs, procurement platforms allow CPOs to drive greater value for their organizations and achieve their procurement objectives more effectively.
In summary, modern procurement platforms are essential for CPOs who want to optimize source-to-pay activities, increase efficiency and reduce costs.
In addition to strategic efforts to reduce costs by driving implementation of technology to streamline and make procurement activities more cost-efficient, CPOs are an important part of the contract negotiation process.
Chief procurement leaders these days benefit from being more hands-on in engaging in supplier negotiations, especially with their most critical partners. To reduce costs strategically and drive value optimization with suppliers, direct involvement from the CPO is increasingly a necessity.
Managing supplier relationships for mutual long-term value has a significant role in ensuring long-term cost reduction and risk mitigation. CPOs can play a role in driving increased collaboration and innovation with crucial suppliers.
The key to optimizing supplier relationships lies in effective supplier management that focuses on building strong, collaborative partnerships. This not only helps in streamlining the procurement process but also drives long-term value for the business by improving the ability of procurement teams to mitigate risks and innovate to find new solutions.
By optimizing supplier relationships with the help of modern procurement software, CPOs can reduce costs, improve operational efficiencies and accelerate their source-to-pay processes, helping them gain a competitive advantage amid an increasingly uncertain economic outlook.
Reducing costs is still a priority for CPOs and will always be a huge part of the procurement function.
However, the necessity of leveraging new technologies to collaborate more effectively with suppliers and mitigate the myriad risks in today’s disruption-prone environment make their increasing involvement in tasks like supplier negotiations and technology implementation almost inevitable. By expanding into these areas, they can continue to make S2P processes more effective and cost-efficient.
For more on how the CPO’s role and priorities are changing this year, download The 2023 ProcureCon CPO Report, available on our Knowledge Bank.