Procurement Can Drive Digital Transformation Through Collaboration

CPOs and other executives have historically had separate roles in the organization. For example, procurement leaders have typically focused on risk management, cost savings, and value production within the organization's spending, whereas IT executives have focused on managing the organization's technology solutions and securing its data.

But in recent years, the role of procurement, technology, and finance are increasingly overlapping.

In previous studies, ProcureCon and WBR Insights learned that procurement leaders were taking on a more pronounced role in technology sourcing. Indeed, procurement organizations throughout various industries have taken significant steps in securing the technologies they need to power their organizations' digital transformations. But challenges relating to change management, lack of buy-in, and lack of coordination between teams remain.

Now, procurement leaders are still driving their organizations' adoption of new technologies, but they are beginning to understand that they can't do it alone. Here's how procurement leaders can work with other leaders in the organization to drive digital transformation.

Coordinating with IT Leaders

Coordination between IT and procurement teams can be achieved through several strategies. Many organizations implement formal processes to encourage the functions to work together. Efforts to improve transparency, outline common goals, and treat each party as a respected advisor to the business can also assist in bridging gaps between CIOs, CPOs, and their respective teams.

According to ProcureCon West's recent report, Guide to a Successful CIO-CPO Relationship, about half of the respondents rated the effectiveness of the coordination between their companies' procurement and IT leaders as either perfectly coordinated (10%) or highly coordinated (40%). Although this represented a significant portion of the respondents, it also meant that half of those surveyed didn't believe their procurement and IT leaders coordinated as effectively as they could on important projects.

Similarly, a slight majority of the respondents said the two leaders coordinate only occasionally (41%) or rarely (10%). At these organizations, procurement and IT leaders only collaborate occasionally, such as when their projects overlap, or only if they believe coordination is necessary.

Perfect coordination between the departments may be elusive in organizations that are only beginning to bridge gaps between the two functions. Furthermore, organizations that haven't implemented end-to-end technology solutions may not have processes in place for the separate teams to collaborate, even if their CPOs and CIOs are already aligned in their objectives.

Nonetheless, providing time, space, and processes for these leaders to collaborate could significantly improve the organization's ability to both adopt and implement new technologies. Both leaders play a role in selecting technologies and their vendors, and both must have input in digital transformation decisions to ensure the organization stays on track with both strategic and financial objectives.

Coordinating with Financial Leaders

Naturally, driving new technology initiatives can't occur in a vacuum, even if more than one department is onboard. Eventually, senior leadership at the organization must decide about how to invest funds, and those investments must be signed off on by financial leaders like the company's CFO.

The results of the Guide to a Successful CIO-CPO Relationship report also suggest that CFOs plan an important role in driving technology adoption, especially when it comes to achieving buy-in from senior leadership.

At 29%, a plurality of the respondents said that their CFO takes the lead in driving procurement's digital transformation at the organization. Another 27% of the respondents said both the CIO and CFO drive digital transformation within the function, suggesting that the CFO plays a significant role in most technology decisions.

Moving forward, organizations would do well to coordinate digital transformation efforts between all three of these leaders—the CPO, CIO, and CFO. With a unified strategy, they could implement a technology acquisition and implementation plan that is both efficient and cost-effective.

Creating a Roadmap for Change—Together

To reach a high level of technology maturity, organizations must first create a roadmap for technology implementation and digital transformation. CIOs, CPOs, and other decision-makers must be able to collaborate on projects that impact the entire organization, such as new technology purchases.

By engaging technology challenges with a unified front, the organization will be able to draw value from its investments faster and more effectively.

Perhaps more important, however, is how effective the collective adoption of new technology initiatives at the top of the organization can be for the organization holistically. The CEO will likely be more open-minded about a technology objective if three leaders from separate departments are championing it.

Furthermore, technology decisions made for procurement can impact the entire organization. It takes a united front to educate employees in other departments about new technologies and processes. With leaders of every department working together, change can be managed more effectively and technology transformations can create value with minimal disruption.