The Role of a Chief Procurement Officer (CPO)

What is the role of a Chief Procurement Officer (CPO)?

The Chief Procurement Officer represents procurement or commercial at Board level. This person is in charge, for global organisations you may have various regional directors but the CPO is the person who has the financial decision making power.

Ultimately the CPO is ideally reporting to the CEO as a direct report though sometimes the reporting line may be into the CFO. The Chief Procurement Officer is responsible for all expenditure within an organisation and should lead his or her team to reduce cost and add value.

The Chief Procurement Officer provides strategic vision.

In the digital age CPO’s work with internal departments to build capabilities and bridge the procurement digital talent.

 

  •  CPOs should use high internal business support to build capabilities in collaboration, talent and digital procurement
  • They should worry about long-term partnerships with their key suppliers and the supply chain, the right people need to have the right leadership qualities to sustain
  • Keep and nurture talent
  • Manage cost and to improve the bottom line
  • Manage risk and have mitigation strategies

The CPO needs to act as a leader and should adapt their leadership style whether if its situational, servant leader or visionary, the procurement team wants to have faith that their leader will help them realise their own desires and understand their role within an organisation.

The Chief Procurement Officer will work with other directorates at the senior level to understand their focus and challenges at a strategic level.  Direction should be given to direct reports to form relationships to work with internal stakeholders to identify upcoming business requirements. A tender pipeline should be accompanied by strong stakeholder engagement, and a plan for effective market analysis, supplier profiling, category management and technological advances in the marketplace.

 

The Chief Procurement Officer is responsible for:

Developing an annual and multi-year procurement strategy Establishing the procurement function as being best in class globally or within industry

Create goals linked to the organisations’ overall strategy

Oversee any  Business Outsourcing Projects

Report to the Board realisation of savings and value add

Sign off on cost reduction opportunities

Create the right environment to foster the talent pool

Input into budgets and how they are managed across categories and spend under influence

Build a procurement centre of excellence

Implement transformational process to raise the profile of the procurement function as commercial specialist

Qualifications

MCIPS or Business Degree/ MBA

Experience 

  • A track record of demonstrating leadership skills.
  • Ability to influence at Board level
  • Commercially sound
  • Solid knowledge of accounting and budgeting management
  • Deep industry experience and general knowledge of how other departments operate
  • Excellent communication, leadership and influencing skills
  • Ability to raise procurement profile as centre of excellence
  • Strategic mindset and enjoys problem-solving
  • Strong analytical skills
  • European languages are a plus
  • International global experience

Experience

10- 15 years in senior supply management/ procurement role in a global organisation or public sector equivalent.

 

 

 

Procurement Training & Free Resources

Free Procurement Resources announced in this post! Listen to your instincts and enrol on some super exciting free online learning platforms.

In addition to using Procurement Templates, you can build your knowledge by taking online course and here I name my top 3 Procurement Resources

  1. Procurement Resource -Alison was founded in Galway in 2007 and has grown organically to become a major force in online education. Today, with more than 11 million learners in 195 countries, Alison is changing how the world learns.We are committed to equality and access to education irrespective of gender, geography, economic status or any other barriers that can so often stunt potential. So we offer a range of free courses that meet the many diverse needs of our learners. The UN declared that everyone is entitled to a free education. That statement will always inspire us.Alison was started and is run by Mike Feerick. Mike is first and foremost a businessman, but one with a difference. He happens to believe that the better you do financially, the more good you can do.  https://alison.com/tag/procurement
  2.  Procurement Resources -FutureLearn offers you a powerful new way to learn online. Every course has been designed according to principles of effective learning, through storytelling, discussion, visible learning, and using community support to celebrate progress. https://www.futurelearn.com/courses/contract-management
  3.  Procurement ResourcesMIT OpenCourseWare (OCW) is a web-based publication of virtually all MIT course content. OCW is open and available to the world and is a permanent MIT activity. Supply Chain Management 

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Happy learning and don’t forget to come back to Procurement Templates for more inspiration, ideas, templates for both free and premium templates to help make your life easier, improve your skills and save time by not having to re-invent the wheel from scratch. Templates are easily adaptable and the buyer’s guide cheat sheets can be lifted to help assist in shaping the specification and act as a checklist for questions that you might need to ask your internal clients to think about when stating their requirements.

The Benefits of using a P Card

I think using a P Card is essential if the organisation deals with high volume low-value transactions.

Why use a P Card (Also known as purchasing card)

Purchasing cards are just like credit cards or more exactly corporate or charge cards. They are physical pieces of plastic that allow the holder to spend money but they are different from ordinary credit cards, corporate cards or charge cards in a few key respects.

With an ordinary credit card, the card statement contains very simple information: The date of a transaction; the merchant name; the amount of the transaction. This level of information is not sufficiently detailed for businesses which is why, when credit cards are used for business purchases, invoices are retained because these contain more detail about what was bought.

Purchasing Card statements are different. The statement contains all of the information that would normally be expected in an invoice including Description of goods bought; quantity; amount paid; tax paid. This level of detail (and much more detail is possible) allows the business to use the card statement and dispense with the need to retain invoices. This is especially advantageous if the statement is received electronically because it allows the business to reconcile the statement automatically with purchase order if they have been used and or record the card transactions in the finance system automatically.

Using purchasing cards can dramatically reduce the administration cost of small purchases for a business.

The cost of processing an invoice after taking into account all of the actions required to pay the final invoice is expensive, a traditional P2P process involves getting authorisation to raise a requisition, raise a PO, goods receipt regardless if the invoice is for £10 or £100,000. Sometimes the cost of raising a requisition and making the payment can cost more than the goods or services bought.

A P Card streamlines the process and is especially useful for low-value transactions.  Most organisations will have a large number of transactions for low-value items, this can become inefficient to process, it can tie up management time making approvals and it can also make the supplier list extremely long and difficult to manage.

P Cards make it easier for staff to make purchases that have an audit trail.

Suppliers like accepting P cards because they get paid on time.

Benefits include:

  • cost reductions, such as eliminating invoice creation, handling and mailing; depositing payments and collection activities
  • electronically deposited funds
  • faster receipt of payments and improved cash flow
  • increased sales, as many organizations solicit only suppliers that accept P-Cards as payment
  • customer satisfaction
  • potential staff reductions within accounts receivable and the ability to redirect staff to more value-added activities

Public sector organisations can use an existing framework  When this expires it is likely that there will be a replacement framework.