Inside Supply Management Magazine

Chief Spend Officer as theNext Procurement Trend

May 18, 2016

The Indirect CPO as The Next Chief Spend Officer

ISM2016 session on Wednesday, May 18

Presenter: David Hearn, chief advisory officer, CPO Advisement Services and former indirect CPO at Juniper Networks, Kaiser Permanente and Sun Microsystems.

Think of the indirect chief procurement officer in a new way: as an organization's chief spend officer, Hearn says.

Such a position enables an organization to rethink its spend management. Instead of measuring KPI-driven results through such traditional methods as transaction metrics, dollars, time and FTEs, among others, establish new measures that can include real metrics delivery and quantitative value, he says.

Tips for achieving success as a chief spend officer:

Establish priorities that include elevating your role to a trusted advisor. Bring executives new insights on how to reach their key business goals.

Establish KPI-driven results.

Hire quality sourcing professionals. Don't focus only on sourcing skills; also look at change management, relationship management, deal negotiation and seat-at-the-table skills.

Build strong relationships. Secure that seat at the table with the CEO, COO and CFO.

Increase the visibility of procurement: Set up an information portal that contains procurement functions, such as processing an invoice, as well as other handy functions that can include reporting a safety violation and requesting assistance for a maintenance issue (like replacing a light bulb).

Use analytics for optimization.

Drive KPI improvement through value-added and cost-savings.

Widen your frame of reference: Understand what's important to stakeholders, align with corporate initiatives, focus on change management and show executives that you delivered KPIs.