Could the CPO Be Replaced by the Chief Value Officer?

Chief Procurement Officer

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What is the role of the Chief Procurement Officer?  And what is the role, and difference, of the CPO as compared to the Chief Value Officer?

Procurement is the process of translating customer requirements into the selection of highly capable suppliers, to timely, accurately, cost-effectively deliver high quality, mission-critical inputs and raw materials to internal customers. As well as assuring the accurate receipt and timely payment of all accrued invoices.

The main work of a Chief Procurement Officer is to:

  1. Create a Shared Vision for the Procurement Function, aligned to organizational objectives
  2. Translate Customer Needs into a robust network of Procurement Processes, Procurement Technology and Procurement Best Practices to meet the needs.
  3. Align the Right People with the vision, and continuously develop them with top class Procurement Skills.
  4. Select the Right Procurement Metrics
  5. Create a Culture for Innovation and Supply Chain Excellence
  6. Develop Robust Rewards, Recognition and Talent Retention Programs
  7. Establish Accountability for achieving Corporate Mandates.
CPO

Value Creation has three characteristics:

1) There is a transformation from one stage to the next

2) All activities around this transformation or conversion of raw materials and information are done right the first time

3) Customers are willing to pay for these activities. All activities, work, and scheduling in a business should be performed with what the organization’s customers consider to be valuable.  Best in Class Business are exceptional in finding out what their customers require their products and services to deliver.

The main work of a Chief Value Officer is to:

  1. Create a Shared Vision for the Value Creation and Innovation Processes, aligned to organizational objectives
  2. Translate Customer Needs into a robust network of Innovation Processes, Value Creation Technology and Value Creation Best Practices to meet the needs.
  3. Align the Right People with the vision, and continuously develop them with top class Value Creation Skills.
  4. Select the Right Value Creation Metrics
  5. Create a Culture for Innovation and Supply Chain Excellence
  6. Develop Robust Rewards, Recognition and Talent Retention Programs
  7. Establish Accountability for achieving Corporate Mandates.
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Both roles are responsible for the execution, alignment, and realization of corporate mandates. Whether or not the CPO role can be replaced by the CVO role depends on various factors and conditions, such as:

  1. Corporate Situation
  2. Corporate Culture. If Sales and Marketing dominated, then CVO may prevail. If Operations driven, CPO may remain intact.
  3. If CPO has strong understanding and command of value creating processes and can influence cross functional collaboration there maybe no need to replace the role.
  4. The hallmark of the domain of the CPO role is Spend Management and requires a profound skill set. If such a role is replaced by a CVO special care must be taken to assure that the Spend Management discipline is not compromised.

What do you think?  Are the Chief Procurement Officer and Chief Value Officer roles the same or are they different?  Are they complementary or are they mutually exclusive?

CPO article and permission to publish here provided by Nikita S. at nextlevelpurchasing.com. Originally published on Supply Chain Game Changer on December 12, 2018.

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