Inside the CPO Agenda
Mastering Risk Before It Strikes
In an increasingly volatile world, procurement leaders must turn risk management into a source of resilience, foresight, and strategic advantage.
Procurement has entered a poly-risk era where geopolitical shifts, supplier insolvencies, compliance changes, and inflation collide. In this environment, risk management is no longer just a safeguard but a strategic lever for growth and resilience.
We spoke with Sebastian Wellmann, Associate Director, and Jan-Dirk Albers, Principal, both experts for risk management in procurement, to explore what best-in-class risk management looks like and how leading CPOs turn uncertainty into competitive advantage.
Key Takeaways
- Risk management is no longer a standalone discipline but an integral part of strategic performance.
- An effective approach connects four key steps: risk identification, assessment, management, and continuous monitoring.
- Risk control towers enable real-time transparency by integrating supplier data, financial indicators, and ESG metrics.
- Structure alone isn’t enough – strong governance and a culture with clearly defined risk ownership are essential.
- Impact Leaders leverage predictive analytics and digital tools to anticipate risks and turn foresight into action.
- Proactive risk management becomes a true performance driver, strengthening business continuity and competitiveness.
Interview Highlights
You describe today’s reality as a “poly-risk environment.” What does that mean for procurement leaders?
Sebastian Wellmann:
It means that risks no longer occur in isolation. We’re dealing with multiple, interconnected challenges: from supply disruptions and inflation to regulatory changes and geopolitical tension, all happening at once. In such an environment, traditional, reactive approaches fall short. Procurement needs to build systematic resilience by embedding risk thinking into every sourcing and supplier decision.
Jan-Dirk Albers:
Managing risk today is less about responding to single incidents and more about navigating complexity. Leading organizations recognize that risk management isn’t a separate discipline – it’s part of strategic performance.
What does an effective risk management approach look like in procurement?
Jan-Dirk Albers:
We recommend a structured four-step approach covering risk identification, assessment, management, and continuous monitoring. What really matters is how these steps are connected. Only when they form an integrated process can procurement anticipate and respond effectively to disruption. Many companies are now setting up risk control towers that bring together supplier data, financial indicators, and ESG metrics in real time, creating full transparency across the value chain.
Sebastian Wellmann:
But structure alone isn’t enough, it needs to be supported by the right culture and governance. True resilience is built when risk ownership is clearly defined and teams are empowered to act fast. That’s why we always combine process design with capability building and digital tools. When done right, risk management becomes a performance driver, not just a safeguard.
How does this tie into what we see in the CPO Study, particularly the link between proactivity and business impact?
Sebastian Wellmann:
Our CPO Study shows that mitigating supply chain risk is the number one way impact-leading procurement teams contribute to their company’s success, even ahead of cost optimization. These teams have moved beyond reactive crisis management and use structured frameworks to anticipate disruption. It’s no coincidence that these Impact Leaders also deliver up to +2% higher revenue growth than their peers.
Jan-Dirk Albers:
What really sets these leaders apart is their use of data and foresight. 41% of them already apply predictive analytics and digital risk management tools to monitor their supply base and spot warning signals early.
How can procurement organizations move from managing risks to mastering them?
Jan-Dirk Albers:
It starts with visibility and structure. Many companies still treat risk as a one-off exercise, but true maturity comes when it becomes part of daily decision-making. That means defining clear ownership, assessing risk consistently, and continuously monitoring critical indicators – whether financial, operational, or regulatory. A risk control tower can play a key role here by centralizing all relevant data and making emerging issues visible before they become disruptions.
Sebastian Wellmann:
And the control tower is only as strong as what you do with the insights it provides. Leading organizations use it to translate early signals into concrete actions from supplier diversification and nearshoring to rapid response measures when thresholds are exceeded. The real differentiator is proactivity: identifying and addressing risks before they escalate. When procurement reaches that point, risk management turns from a safeguard into a strategic advantage, protecting business continuity and strengthening competitiveness in the long run.
Read the full white paper
Procurement can’t eliminate uncertainty but it can lead the organization through it. When risks are managed with foresight and embedded into decision-making, they become a source of strength, not vulnerability.
Download our CPO Study Whitepaper to discover how leading procurement teams turn risk management, agility, and strategic foresight into real boardroom impact.
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