Demandbase Connect

Written by Tony Wessels | 
September 30th, 2011

Dissolving the Functional Silos – Jon Hansen on the Coupa Cabana

Removing the Barriers of Collaboration and Influence Within the Enterprise

 

“Our 5th annual survey shows the CIO entering a period of rapid transformation. Expect more business responsibilities and (say 32% of respondents) even a change in title.

 

Other critical factors include . . . a CIO with the well-rounded skills to be a trusted business leader, and a CIO who spends a good deal of time communicating with constituents – both internal and external customers.”


- from CIO Role Revs Up, by Brian Gillooly – Information Week’s Optimize (June 2007)

Gillooly’s article is spot-on in describing the rapid transformation in the CIO’s role. A similarly dramatic transformation is reshaping the impact of an organization’s purchasing department.

As recently as 2006, the general consensus (according to a lively discussion at that year’s CPO Agenda conference) was that the best (and most qualified) individual to oversee a company’s purchasing department is someone who does not have a purchasing background. And in 2007, an Aberdeen survey revealed:

 

  1. less than 20% consider the work of CPOs and their staffs as having a very positive impact on competitiveness
  2. on average only 46% feel that the procurement team has contributed to enterprise growth
  3. only 57% of CFOs feel that procurement contributes to enterprise profitability

 

On top of that, the study showed 73% of the savings claimed by purchasing departments are routinely discounted by finance as irrelevant.

 

The purchasing department’s territory is being shaped by external (and internal) forces of change that threaten to leave many experiences procurement professionals out in the cold. While some traditional purchasing associations scramble to update their education methodologies in an effort to deliver relevant content, in many instances, purchasing professionals feel detached (or even abandoned) by their profession.

 

So where do we go from here? American social writer and philosopher Eric Hoffer writes, “In times of change learners will inherit the earth . . . while those who refuse to continually learn inherit a world that no longer exists.” The learning experience for procurement will begin with taking an expanded view of the enterprise as a whole. From finance to emerging technologies to marketing strategies, purchasing professionals can no longer confine themselves to the outdated definitions of their traditional roles.

 

As is the case with their finance and IT counterparts, purchasing professionals are not islands unto themselves and therefore have to take the proactive step to inform, understand and empower themselves through a more holistic view of how all the individual parts of their collective enterprise work towards a shared and beneficial outcome.

 



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