CIOs and CPOs Must Work Together to for Technology Adoption and Digital Transformation

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Procurement teams have made significant progress in the role of technology sourcing. And although much of this progress can be attributed to the strategic value procurement now brings to organizations and their boardrooms, the partnerships formed between procurement and IT teams—particularly CPOs and CIOs—can't be discounted.

Nonetheless, CIOs and CPOs have historically had separate roles within the organization. Typically, procurement leaders have focused on risk management, cost savings, and value production within the organizations spending parameters. Meanwhile, technology executives have focused on managing the organization's technology solutions, securing its data, and improving efficiency through digital transformation.

No, these two roles have an opportunity to come together to manage change in the organizations, and both parties have an important role to play—if they can work together.

Lack of Coordination Between Procurement and IT Stands in the Way of Technology Adoption

Procurement organizations throughout various industries have taken significant steps in securing the technologies the organization needs to power digital transformation. But evidence suggests that coordination between procurement and IT departments is a must for the adoption, implementation, and management of such technologies to be successful.

According to a recent ProcureCon report, "Guide to a Successful CIO-CPO Relationship," 64% of procurement, supply chain, and risk management professionals believe that problems with change management or integration processes are significant challenges to adopting the new technologies the organization requires. Similarly, 59% of them believe that a lack of coordination between procurement and IT is a challenge when adopting new technologies.

Other key challenges to technology adoption cited by the respondents include a lack of buy-in from key decision-makers (44%) and budget constraints (37%). By working together, CIOs and CPOs can approach other decision-makers with agreed-upon technology ideas to help achieve buy-in.

The report also found that significant numbers of respondents coordinate with their finance departments to overcome budget hurdles and reach their technology objectives. In particular, the CFO is increasingly responsible for leading the organization's digital transformation of the procurement function.

According to the study, 29% of the organizations said their CFO leads such digital transformation efforts. Meanwhile, 27% said that both their CIO and CFO take the lead, while 16% said that their CIO and CPO take the lead.

Nonetheless, CIOs and CPOs still play an essential role in technology discussions and can play an important role in change management initiatives within the organization. With the right leadership, every department can ensure new technologies are adopted across the board and new workflows and processes are implemented successfully.

As such, the ability of procurement and IT leaders to coordinate on technology initiatives will be central to the organization's ability to achieve digital transformation moving forward.

Organizations With Working CIO-CPO Relationships Have Made Headway in Technology Development

Despite lack of coordination being a hindrance, strong coordination between CIOs, CPOs, and their respective departments can help the organizations move closer to their digital transformation objectives.

For procurement, in particular, strong working relationships between the departments can move the function further toward a holistic, end-to-end digital procurement solution. This is a capability that has become a standard for excellence in procurement.

Based on the "CIO-CPO Relationship" study, the efforts toward such a solution are ongoing for most organizations, as 48% said they were "mid-way" in their journey toward a holistic, end-to-end digital procurement solution and 22% said they were starting to build a foundation for their solution. Respondents who were midway toward implementation had established a way to measure what was promised versus actual performance on all their contractual relationships. However, they said they cannot yet act proactively.

Ideally, the procurement organization will have fully implemented a holistic, end-to-end digital procurement tool before pursuing further change within the organization. This would provide the function with the capability to cover procurement processes ranging from vendor selection, contract negotiations, post-execution performance, payout monitoring, and proactive spend control.

To reach this point, procurement and IT leaders must help to coordinate both adoption and change management within the organization. By working together, both functions can lead the organization toward better efficiency and agility.

Don't Miss the Next ProcureCon Event

In years past, procurement leaders believed that the function would play a much more strategic role within the organization. In many cases, this prediction has come true, as procurement leaders now have a say in key decisions regarding technology implementation and other strategic objectives.

Now, many of the procurement and IT leaders are also hopeful that digital transformation can remake the function, and their success increasingly depends on their ability to work together.

The relationship between procurement and IT leaders is sure to be a hot topic at the next ProcureCon event. Don't miss your chance to register today.