My first Op-Ed, Open Letter to the C-Suite, appealed to the C-Suite to hold Procurement accountable for not investing in technology. The blog referenced a Gartner perspective that only 22% of procurement leaders have a long-term digital strategy. I touched a nerve, invoking comments from a few readers suggesting there are procurement leaders - the Magical CPO - that understand how to navigate the C-Suite to get the budget for technology investments.
To give credit where credit is due, Nikesh Parekh, CEO of Suplari (Now Microsoft), is the source for the term Magical CPO. It describes a procurement leader that understands how to build business cases and secure budgets for technology investments that improve their department's efficiency and effectiveness while supporting the needs across all business disciplines. The Magical CPO persona, by definition, is juxtaposed with the technology laggard. If you saw my first Op-Ed, I noted that 78% of procurement leaders are technology laggards without any digital automation strategy.
The Magical CPO persona
Let’s unpack the Magical CPO persona to agree on common qualities. My views are based on my observations and experiences over a 30+ year career in procurement. There is no Wikipedia page for Magical CPO nor a Google search that prompts any relevant hits - I checked. While I understand there are more sources than Wikipedia and Google, the point is that there is generally no standard persona for the Magical CPO. Here’s my interpretation of what the Magical CPO must possess:
- Views technology as an enabler to the extent they know the language and can intelligently converse in the space. Some call this quality the ‘digital visionary.’
- Knows how to inspire and lead a team. A mentor to other procurement leaders. A thought leader.
- Understands business drivers and how to optimize them to maximize the proper business outcomes. Application and delivery are vital in demonstrating success here.
- Operationalizes process and policy based on the needs of the business. Knows business levers, and their related challenges from the business perspective and balances process and policy to stay compliant from a controls standpoint. Agility and flexibility to the needs of the business without abdicating your role is key here.
You can likely add or even challenge the above attributes but the key takeaway is that the Magical CPO balances the needs for controls/compliances vs. results. They recognize that to not be considered a bottleneck, they must replace manual effort with technology. They challenge their organization not to customize or spend considerable resources trying to make an existing technology it cannot do. Today’s technologies combine artificial intelligence and machine learning within a purposeful application. Additionally, input from multiple customer’s feedback accelerates innovation at a far greater pace than any single department could conceive and execute to deployment.
How Procurement Leaders Utilize Technology
When transforming a function, I’ve always started with technology. If done right, it scales the team in a smart and intelligent way. Today’s advanced technologies do this on steroids. Understanding technology requires the procurement leader to talk the talk and walk the walk while also making their organization an innovation leader within their company. Jason Busch recently challenged procurement leaders in his LinkedIn post, A Digital Test for CPOs: Will you be Relevant or a Relic in 2025? The article suggests most CPOs will not be relevant in 2025 if they can’t or are unwilling to identify, fund and deploy critical technology required to keep their job.
Coupling the digital visionary with the trusted inspirational leader that unleashes true greatness in others will maximize the Magical CPO's business outcomes. Commanding and controlling leaders do not and cannot achieve the same results as trusted inspirational leaders. I encourage reading Trust & Inspire, by Stephen M. R. Covey; to empower and enable our teams to be successful in the right way. And no I don’t get a kickback. I enjoy constantly learning.
One final thought to paraphrase Jeff Epstein, “as a CFO if procurement came to me with an investment request I would approve it provided it was compelling. Compelling defined as the IRR, ROI, payback or whatever the internal financial measure to support an investment met expectations.” This same point is further made in Deloitte’s article, Targeting procurement: Why CFOs should take direct aim at indirect spend, shared in CFO Insights.
If you have a compelling business case and the CFO is applying pressure to boost efficiency by leveraging advanced technologies, why not go for the prize? Write that business case supporting essential technology investments. Pausing for effect, perhaps we have another Op-Ed? How to write a compelling business case. I am not the expert here; however, I have been successful in appealing for a budget to invest in digital innovation. Let’s take that discussion up in May/June.
Greg Tennyson is the SVP of Strategy & Procurement at Fairmarkit. Former CPO & VP, Corporate Services at VSP Global (2013 to 2021). Prior CPO and VP S2S at salesforce.com (2008 to 2013) and Oracle Corporation (1998 to 2008). M.Sc. Management from Saint Mary’s College of California with professional credentials from SIG, NAPM and NCMA. 2018 Hall of Fame inductee into SIG. 2019 CPO of the Year, Ardent Partners.