What a Fractional CPO Actually Delivers in the First 90 Days
The first 90 days of a Fractional CPO engagement need to move quickly. Three months is plenty of time to understand where the main procurement issues sit, decide what needs attention first and start delivering some commercial results.
I tend to break those first three months into three stages. During the first 30 days I want a proper view of the spend, contracts, suppliers and immediate risks. The next month is about getting the priorities moving. By the end of month three, I expect to be able to show what has changed and what value has been delivered.
Days 1 to 30: work out what’s actually going on
The management team will normally have a fairly clear idea of where they think the procurement problems are. Supplier prices are too high, there are too many suppliers, contracts aren’t being managed properly, or the business isn’t getting enough leverage from its spend.
They’re often right about some of it, although the data usually throws up a few surprises.
I’ll start with the spend. Supplier and AP data, purchase orders, contracts, upcoming renewals and whatever else is available. The quality varies enormously. I’ve seen businesses with very good data and others where simply working out the total spend with a supplier takes some digging.
This is usually when things start to become interesting. You might find several departments buying the same service from different suppliers, all on different terms. A contract that hasn’t been looked at for years might be approaching renewal. Spend with one supplier can turn out to be considerably higher than anyone realised once purchases across different departments or sites are brought together.
None of these things are particularly unusual. They tend to happen as businesses grow. Buying decisions are made locally, new suppliers get added, contracts are renewed and eventually nobody has a complete view of it all.
The numbers only tell part of the story, so I’ll also spend time with Finance, Operations and the people actually buying things and dealing with suppliers. They tend to know where the frustrations are, which suppliers cause problems and where the current process gets in the way.
By day 30, I want to be able to sit down with the MD or FD and give them a straightforward picture of the procurement position. Where the money is going, which contracts need attention, where the risks sit and where we have a genuine opportunity to improve things.
There will normally be plenty we could do. The important part is deciding what we should do first.
I would rather leave that meeting with five sensible priorities than a spreadsheet containing 40 opportunities that nobody has the time or resource to deliver.
Days 31 to 60: get things moving
The second month is when those priorities start turning into live activity.
I would normally expect a few meaningful sourcing or commercial projects to be underway by this point. They won’t necessarily be the biggest areas of spend. Timing matters. So does the complexity of the category and how quickly the business can make a decision.
A contract coming up for renewal might need immediate attention. There could be an obvious opportunity to consolidate several suppliers. Another category may have grown considerably over the years without anyone going back to the market, Those are the sorts of opportunities I want moving.
While that’s happening, I’ll usually start dealing with some of the less visible issues we found during the first month.
Approval levels may no longer make sense for the size of the business. Supplier onboarding might be inconsistent. Contracts could be sitting in different departments with nobody keeping track of renewal dates. Purchase orders may be raised after the invoice arrives because that’s simply how people have got used to working.
You don’t need to turn all of that into a major procurement transformation programme. A few sensible controls can make a big difference.
Clear approval levels, some consistency around supplier onboarding, proper ownership of contracts and renewals, and a purchasing process people can actually follow will deal with a lot of it.
I’ll normally have a look at purchase-to-pay during this period as well. Duplicate suppliers, retrospective POs, poor coding, inconsistent approvals and maverick spend aren’t especially glamorous, but fixing them can improve both control and the quality of the data we’re using to make decisions.
By day 60, I want the business to feel that something is happening. Suppliers are being challenged, sourcing activity is underway and some of the issues that have been hanging around for years are finally being dealt with.
Days 61 to 90: start putting numbers against it
By the third month, some of the work should be producing results.
A contract that was heading towards another automatic renewal may have been renegotiated. Several suppliers might have been consolidated. A category may have gone through a competitive process for the first time in years. Pricing, payment terms or service levels may have improved.
Whatever we’ve achieved, I want to be able to evidence it.
Procurement savings can become a surprisingly creative subject if you let them. I’ve seen enormous savings pipelines that never seem to make their way anywhere near the P&L. So something Finance can recognise.
If we’ve saved money, we should be able to explain what changed, how the saving was calculated and when the business will see it. If we’ve avoided a cost increase, that’s useful too, but it should be reported as cost avoidance rather than quietly turning it into a saving.
The reporting doesn’t need to be complicated. By this stage, an MD or FD should be able to look at one page and understand what’s been delivered, what’s currently being worked on, which contracts are coming up and where the main supplier risks sit. There should also be some thought going into what happens when the Fractional CPO isn’t there.
Most have someone doing elements of procurement. It could be a buyer, purchasing manager, Finance team or somebody in Operations who has gradually inherited supplier responsibility. Wherever possible, I want those people involved in the live work. Working through a real negotiation or sourcing exercise together is far more useful than handing someone a procurement playbook and hoping they read it. Over time, the business should become more capable of managing procurement itself.
What the first 90 days should look like
The detail will obviously vary from one business to another, but the direction should be fairly consistent.
UNDERSTAND → PRIORITISE → DELIVER → PROVE
Days 1–30 UNDERSTAND →
Spend visibility, contract position, supplier picture, stakeholder input and the first commercial priorities agreed.
Days 31–60 PRIORITISE →
Sourcing activity underway, suppliers being challenged, contract and approval controls improving and P2P issues being addressed.
Days 61–90 DELIVER →
First commercial outcomes delivered, savings evidenced, upcoming activity visible and simple procurement reporting in place.
At day 90 PROVE, the MD or FD should have a much clearer view of what procurement owns, what has been delivered and what is coming next.
So what have we actually achieved?
I think this is a useful question for any Fractional CPO engagement. the MD asks it at the end of the third month.
We know where the money is going and who we’re spending it with. We have a much better view of the contracts and renewals coming towards us. We’ve identified the areas worth tackling and started working through them. Some have already delivered results. The basic commercial controls are improving and there’s a visible pipeline of work for the next few months.
That’s a good amount of progress in 90 days. Of course, every business will be different. A £20m manufacturer with 300 suppliers is going to have a very different procurement landscape from a £100m service business with thousands of suppliers and multiple locations. That’s also the attraction of the fractional model. The business gets experienced procurement leadership without immediately creating another full-time senior role.
For businesses where the requirement is broader, with ongoing sourcing, purchasing or category management resource needed across the organisation, [procurement outsourcing](https://www.pro-outsourcing.co.uk/procurement-outsourcing/) can make more sense.
Either way, I’d expect procurement to be judged in much the same way.
- What has changed?
- What value have we delivered?
- And what are we doing next?
If you’re considering a Fractional CPO, I’d ask those questions before the engagement starts rather than three months into it.
Ask them what they expect to have achieved by day 30, day 60 and day 90.
If you’d like to talk through what the first 90 days could look like in your business, [get in touch]
(https://www.pro-outsourcing.co.uk/contact-us/) for a no-obligation conversation.