Inch by Inch, the CPO Transforms - Digitally CPOs who want to lead their companies on an ambitious, disruptive and profitable journey would be wise to start in areas where gains are easily demonstrated and to collaborate with an experienced partner. Digital transformation of the procurement function is hardly a new topic, the drum has been banged by many people for some years now - a significant number of the procurement function’s goals rely on digital capability increases (automating IT purchasing to free up time to focus on other more strategic initiatives, leveraging supplier relationships in other ways or even simply proactive, rather than reactive, procurement planning etc.). However, according to the latest CPO Report from Deloitte, it’s the business priorities that are most critical to align to, and while cost reduction and risk reduction are the top two cited priorities in today’s tumultuous times, the next strongest business priority is expanding/introducing digital business models. This can be seen to create a three-pronged imperative for procurement: Align early to digital business strategies and then tap suppliers’ digital innovations Gain strong IT alignment and IT sourcing capabilities to support agile development and optimization of commercial relationships Lead by example within procurement to develop digital capabilities that can be extended beyond procurement’s boundaries (e.g., market intelligence and predictive analytics) Easier said than done. Which procurement or IT functions don’t struggle with the digital complexity of managing multiple in-house and third-party digital solutions? This complexity effectively means CPOs must align their objectives and values with other functions’ executives. First step? CPOs need to discover how their function can be best prepared to assist the business in achieving its goals. As our clients will attest, automation and consolidating spend (of IT purchasing in our case) can help make life a little easier for procurement leaders. CPOs can turn to automation for tactical activities (e.g. indirect IT tail spend purchasing) to enable a focus shift to strategic activities. Automating or accelerating aspects of S2P or P2P cycles are obvious starting points. Yes, CPOs should define a bold digital vision but execute step by step, based on strong foundations. An effective digital strategy is one that is both effective and doable and takes many forms during the digital journey. Innovation may be hiding in plain sight with not only IT suppliers like Markit, but all suppliers pursuing digital business strategies. Inch by inch, as we say at Markit, our IT purchasing is a “safe bet” - a reliable and proven way to consistently reduce the total cost of IT purchasing and in turn, give a CPO the ammunition to prove to other execs that digital enablement of procurement “works”, just like it has for 8000+ international Markit clients including 20+% of the Global Forbes 2000. Next-gen-tech is tempting us all and while it’s important to keep abreast of the leading edge it’s important to note that “digital” can have good and bad effects. CPOs who want to lead their companies on an ambitious, disruptive and profitable journey would be wise to start in areas where gains are easily demonstrated and to collaborate with an experienced partner. IT purchasing is one such area and Markit have been solely focused on helping clients succeed in reducing the total cost of IT purchasing since 2003. Enough said. This article was inspired by, and includes material from, The Deloitte Global CPO Survey 2019 (pdf)