The IBM Institute for Business Value recently released a new thought leadership study (Chief Procurement Officer Study: Improving competitive advantage through procurement excellence) that should be very interesting for sellers who regularly deal with chief procurement officers (CPOs) or people who report directly to CPOs.
The paper’s creators surveyed 1,128 CPOs from organizations with annual revenues in excess of $1 billion to ascertain how procurement has evolved at these top-performing companies. While cost-cutting measures following the 2008 economic crisis increased the influence of many CPOs, it is now clear that leading-edge CPOs have become more than cost-cutting bulldogs. Of course, highly effective CPOs are still excellent at traditional procurement cost-reduction practices. They not only toe the bottom line, but are highly innovative, leveraging collaboration and their connections to the supplier universe to improve their companies’ profits and practices. In fact, top-performing CPOs and companies are heavily focused on a variety of metrics that go beyond cost-cutting to overall enterprise, valuing elements such as collaboration, risk and time to market.
For those on the seller’s side of the equation, this study bears notice. It touches on several critical aspects of success in sales negotiations. Some of these include:
- The ability to craft your value argument with distinct, multiple audiences in mind
- Considering the risk/reward levers and motivations of each individual
- Knowing how the other side evaluates its people; is the CPO across the table seeking to achieve more than cost savings?
Preparing to drive a successful outcome on a deal means using studies like these to gain a deeper understanding of the individual CPO’s role and goals within a particular company. Then, the inquiry needs to get more specific, taking into account the unique factors of the client and the specific CPO.
