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How Innovative Supply Management Technologies Create Opportunity for CPOs

Editor’s Note: This article is based upon Ardent Partners’ recent report, The CPO and CIO’s New Approach to Evaluating Enterprise Technology (sponsored by Coupa). Click to download (registration required).

The age of innovation has arrived at the doorstep of enterprise software and the Chief Information Officer (CIO) and Chief Procurement Officer (CPO) are well-poised to take a leadership role. Recent advances in enterprise technology have made the solutions generally more robust, usable, and accessible, and they have also changed the way that leading teams evaluate, deploy, and optimize them. They have also created opportunities for the CIO and the CPO to positively affect change in their organization and drive value across the enterprise. Here is a look at what tech and innovation means for the CPO.

New Opportunities for the CPO: Earlier Engagement, Greater Value

As the CPO’s and procurement’s influence grows across the enterprise, they find new opportunities to positively impact performance. And as self-service technologies continue to de-emphasize an IT-centric “command and control” model, CPOs and procurement teams can continue to expand into IT solution evaluation and adoption. Although IT is not their typical sphere of influence, CPOs and procurement can add value to technology evaluation in a number of ways.

By engaging earlier in the solution evaluation and selection process, CPOs and their teams can help to rationalize stakeholder technology requirements. By collaborating with other stakeholder organizations, like sales or marketing, procurement can dig into their proposed IT requirements and serve as a “check” against mismatched technology investments. Often, line-of-business users incorporate legacy behaviors, processes, and other preconceived requirements into the technology evaluation process. When pressed on the rationale, stakeholders may not be able to demonstrate how a given solution with a particular feature set would add value to their operations. CPOs and procurement teams can act as objective voices of reason, and help users separate “nice to haves” from “must haves” during the evaluation and selection process.

They can also bring a “total cost of ownership” (TCO) approach to the process and illuminate new dimensions of how much the solution will cost the enterprise over its lifespan. A TCO approach looks not only at the initial price that is paid, but also: at the integration and associated consulting fees; at the maintenance and upgrade costs; and at the security and storage costs. And if staff need to be trained or retrained on the solution, then there can be added costs, as well. The TCO approach also looks at the total value of the deal: the efficiency and effectiveness gains, technological characteristics, internal stakeholder value, and trading partner value associated with the adoption. If the solution has advanced features that increase process efficiencies, user effectiveness, and third-party enablement and value, then all of that value needs to be quantified and considered along with the costs.

Final Thoughts

CPOs and procurement teams increasingly have more skin in the game when it comes to technology solution evaluation and adoption. The sooner that they get involved in solution selection projects (i.e., at the outset), the more influence they can have within the project and the more value that they can provide to the enterprise as a whole. They can rationalize solution requirements, impart their wisdom on tough negotiations, and identify best price versus best value. In doing so, CPOs and procurement teams can help constituents take a TCO approach to the solution selection process and become more strategic planners, tech adopters, and savers.

Want to learn more? Download The CPO and CIO’s New Approach to Evaluating Enterprise Technology (sponsored by Coupa)!

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