Is the CPO and category management dead?

ff_rebirthRecently I attended ProcureCon East Indirect in Orlando Florida. One of the main themes revolved around that the CPO and category management is dead or will be dead soon. The idea goes around that CPOs are no longer procurement centered but should move to value let´s say Chief “Value” Officers. They should go from a bottom line benefits objectives to a value-added objective. Totally agree that the procurement function should focus on adding value to the organization, the part I do not agree is that CPO is dead. To me, the CPO should of being looking to add value the whole time, not being focus on savings only, if that is the case then maybe did not get the whole idea of a strategic unit to support the business in the first place. It might be the case of a CPO losing perspective, track or too focused on one objective neglecting the rest.

Let me explain why CPO should be looking for value in the first place. Procurement function is part of an ecosystem made up of itself, purchasing, vendors and stakeholders. It´s a component of a system, it purpose is to develop strategy around the top spend so value is added to the ecosystem. Routine non-strategic spend goes with the purchasing counterpart. If Procurement is not adding value, then it is not fulfilling its role in this ecosystem. So, CPO are not dead they are as alive as ever, if you feel that its dead then it only needs a retracing to adding value again. Not dead just lost its way.

On category management that is another one that its being call upon death in the latest discussion. To me it is not dead but is evolving because categories are not as straightforward as they use to be. There are more categories and more intercepts. Just because your spend does not fit a set catalog of categories it does not mean that it cannot be categorized. I can have a bag of M&M candy and separate them by color and will have no issue; Or by flavor or by size or by whatever. Is up to you to create categories that makes sense to you.

Another part of category management is the actual category manager. Not dead either, just evolving into a role were a category manager needs to understand categories that are not as standard as they use to be, but still, expertise can be develop and used in strategic thinking that, again, meets the objective of adding value.

If you create a stiff definition of a CPO and Category management in a world everchanging you are going to claim its death sooner than later. For all that you define with a stiff definition will “die” then. Roles and frameworks are here to evolve not “die”.

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