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The new year has arrived, which means it’s a great time for chief procurement officers (CPOs) and their teams to reflect on any lessons learned in 2022, review their progress over the last 12 months and then put some plans in place to build on those successes over the next 12.
Here are six New Year’s resolutions that all CPOs can add to their lists and put into action in 2023:
1) Give all of your vendor and supplier relationships a once-over. “Make sure your vendors and suppliers are top-notch and working well for you,” DemandStar advises. If there’s a supplier that’s been underperforming, review the contract to determine when they can be replaced with a better option. “Plan now for those RFPs so that you aren’t surprised when it’s time to renew the contract and then rush on the decision,” it adds.
2) Review your department’s training needs. The start of the year is a great time to identify employees who may need additional training and to get those activities slotted in and budgeted for. “Review training needs and options so that requests can be submitted for next year’s budget,” DemandStar advises. “Craft a pitch with a list of reasons why the department would benefit from the training so that you’re prepared to address any questions.”
3) Evaluate processes and procedures, and then change any that aren’t working. Do a self-evaluation of 2022’s key performance indicators (KPIs) and make a performance assessment. Did you reach your budget goals? Were projects completed on time? What about diversity inclusion—has that benchmark been met? “Make a list of areas of success and areas of opportunity,” DemandStar says. When setting goals for 2023, be sure to include specific data points where appropriate (as opposed to just using broad statements).
4) Do a better job of gathering and acting on feedback. Survey all stakeholders, including your own team, end-users of your procurement systems, your suppliers, heads of other functions and your leadership team. Then, compare survey results with your other data and determine whether the survey results confirm or contradict those other sources of information. “Use survey results to build a case for taking action and driving continuous improvement,” Hugo Britt writes in “5 Meaningful New Year’s Resolutions for Procurement.” “Once you’ve made the change, survey again to measure its impact.
5) Make sourcing events more accessible to diverse suppliers. As more organizations pay closer attention to diversity, equity and inclusion (DEI), having a diverse supplier base is becoming more important than ever. The problem is that supplier diversity strategies will fail to bear fruit unless you make it easy for diverse suppliers to work with your organization, says Britt, who advises CPOs to:
- Simplify any complex processes that may be discouraging to diverse suppliers.
- Talk to colleagues about supplier diversity to help others get on board with the benefits.
- Pay diverse suppliers on time.
- Make yourself available to guide suppliers through your requirements and answer any questions.
- Look for contract hurdles that exclude small, diverse suppliers.
- Look for ways to help increase diverse suppliers’ capacity so you can work with them more.
- Give suppliers constructive feedback and ask for their feedback in return.
6) Lean even further into automation. According to Spend Matters, automation will be the hallmark of procurement in 2023. It says forward-looking procurement teams will continue to lean into automation in the coming year to achieve greater efficiencies and increase their ability to scale. “As purchasing becomes more decentralized, procurement professionals will simply be unable to handle the sheer volume of purchase requests and approval workflows without automation in the intake-to-procure lifecycle,” the company says. “The only path forward is automation.”
