“In this age of volatility, there is no other way but to reinvent yourself. Agility is the only lasting advantage you can have over others.” Jeff Bezos explains that innovation, and the questioning of its processes, offers opportunities to face various contemporary challenges, in all areas. The Procurement, as we saw during the COVID-19 crisis, is an essential lever for efficiency and cost reduction for a company. However, it has changed little in recent years. The current trends of digitalization, artificial intelligence (AI) or automation offers numerous developments in the field of procurement. However, they are not the only ones that can improve the work of the CPO. In this article, discover how to improve your practices as a CPO in 2025.
Redefining the relationships between the”Chief Procurement Officer“and its suppliers
It can be difficult to have a relationship of trust with your suppliers. First commercial partner, have a trusting and empathetic relationship towards its suppliers is not customary in procurement. However, extensive collaboration can bring a lot to both companies. Really understanding their needs, their main costs or even their competitive advantages allows for more relevant agreements for all parties. It is therefore necessary to be interested in your supplier, to share with transparency the expectations of the collaboration and its objectives. Redefining a relationship of trust and proximity seems the way to improve its collaborations, so that they are more adapted to the activities of both companies.
This ambition can also be extended to knowledge sharing : sharing know-how and technology with a partner will strengthen the relationship with its suppliers. Having a stable and close partner is an important competitive advantage that will make a difference in difficult times.
Transforming your processes with e-procurement
The purchasing cycle in procurement is composed of numerous steps that must be respected. The use of new digital technologies, called “e-procurement”, makes it possible to streamline purchasing and procurement processes.
The challenge of these new technologies is not to make better decisions than humans to replace them, but to reduce decision time to streamline processes. Artificial intelligence, beyond a simple digital medium, supports decision-making by participating in the analysis and negotiation phase.
Democratising generative AI in businesses could facilitate contacts with suppliers in many ways. At AutoLex, we are working on an AI capable of carrying out a negotiation independently and without bias between two parties. AI is a tool capable of analyzing, but also of Suggest solutions based on its calculations, which will allow procurement teams to focus on the strategic and relational aspects of their collaborations with suppliers.
E-procurement is one of the most important levers of 2024. Accelerating procurement processes means a better control of purchases, and better collaboration between strategic and operational teams.
Facilitate the revision of specifications with AutoLex's generative AI
Procurement requires good analytical skills. However, processing a Request for Proposal (RFP) is generally long and difficult due to its large volume. AutoLex allows the use of generative AI to perform a compliance analysis of the desired documents with reference to the specifications provided. Thus, AutoLex assists procurement teams to provide a preliminary analysis of the differences between the document and the strategy:
- Gap analysis : in the form of red or orange flags, AutoLex reports the sections that do not comply with the specifications provided and proposes solutions aligned with the specifications.
- Answers to personalized questions : It is possible to ask questions in natural language and receive a complete answer with all the information requested by AutoLex.
- Generating compliance clauses : Write a prompt and generate a clause with the right vocabulary to change your contract quickly.
- Collaboration compatibility : Integrated as a Word extension, it is possible to work in a team for better collaboration.
You want to find out more about AutoLex, ask for a free demo !
Include the issue of sustainable development in procurement with suppliers
Since the Paris agreements, each company has committed itself to meeting carbon neutrality goals, based on various criteria. These criteria are defined on different scopes.
Scope 1 represents the direct emissions of a company and scope 2 represents indirect emissions related to energy, not emitted directly on a production site.
Scope 3 includes all greenhouse gases (GHGs) that are emitted indirectly, and that are not under the control of the company. This scope represents the majority of the shows of a company since it includes purchases, the transporting or even broadcasts viautilizing of the products sold.
The role of procurement is crucial in allowing companies to respect their ecological commitments. Communicating with suppliers on these topics is necessary and will represent a competitive advantage for partners. Here are examples of actions you can take:
- Share with the supplier the emissions-related data, to effectively measure the environmental impact of your business
- Support your suppliers in their carbon strategy : some competitive advantages can be beneficial to your partners without knowing them. Take an interest in its suppliers, question their needs and supporting them if possible will strengthen relationships in procurement. The example of SIEMENS represents in concrete terms what can be done.
- Define goals and a common strategy : establishing common goals can make it easier to achieve these goals since the effort will be distributed between the two partners, will cover a wider field of action, and proves the reconciliation of the vision of the two partners at the ecological level.
Questions/answers
- What is a Chief Procurement Officer ?
The Chief Procurement Officer (CPO) is responsible for all stages of procurement. He is accompanied by experts in order to make the best decisions in the field of procurement within the company.
- What are the 5 stages of the procurement process?
The stages of the procurement process are sourcing, negotiation, purchasing, receiving and maintaining supplier records.
- What is the difference between procurement and sourcing?
Sourcing is only about selecting suppliers based on established criteria. Procurement generally encompasses all the procurement stages ranging from sourcing, purchasing to the management of relationships with suppliers.