How to Elevate Procurement's Influence Across the Business
By Mackenzie Oakley | January 11, 2022
Does the following hypothetical conversation sound familiar (or strike a nerve…)?
Stakeholder: “Hi! Are you the procurement team?”
Stakeholder: “Would you mind helping me with this purchase?”
Procurement: [Looks at document] “… It says here this has to be done by 5pm today.”
Stakeholder: “That’s right! Can you help me get a better price?”
Procurement (frustrated): “With this deadline, there’s literally nothing we can do except process the purchase. Why didn’t you get in touch in the planning phase? There’s so much value we could have added here!”
Stakeholder (embarrassed): “The planning meetings were for senior management only…”
Elevate procurement's influence across the business
Influence is one of those perennial challenges within the procurement profession. It’s the result of procurement’s 20th-century history as a back-office function where buyers did little more than react to a purchase signal from stakeholders.
As such, for the past few decades, procurement has had very little opportunity to be proactive and find ways to bring additional value to their organizations.
Modern-day CPOs want their teams to be known as strategically-oriented and trusted advisors to the business, but this cannot happen without investing in a change program to re-shape perceptions.
This article gives three starting-points on how to elevate procurement’s influence in organizations of any size.
Align (and re-align) with organizational goals
Procurement as a profession has a bad habit of falling down its own rabbit-hole of targets, goals and KPIs that mean little outside of the function itself. As a rule, every procurement KPI should be linkable to an enterprise-level goal. This might mean, for example, that procurement’s efforts to diversify its supplier base would be linked to the overall company goal of risk reduction.
Something to keep in mind is that while procurement goals may be fairly consistent, company goals can shift surprisingly fast due to factors such as changing customer demands or a new CEO. It’s therefore a good idea to schedule regular reviews where the CPO takes a step back to compare procurement’s KPIs with the company-wide KPIs to ensure they remain aligned, and make any necessary adjustments.
Drop the procurement lingo
This may come as a shock, but nobody outside of the procurement team wants to hear about tenders, RFPs and RFQs. Nor do they want to hear about supplier relationships, commercial models or supply chain optimization. What they want to hear about is how procurement will help them do their job better.
This means that procurement professionals not only have to adapt the content of their messages to suit different audiences, but the language used in those messages too. In other words, we need to be multilingual. Procurement professions must learn to communicate in a way that is understandable to the finance team but will need a completely different vocabulary when it comes to engaging with CSR professionals.
One of the best ways to become familiar with the different “languages” used throughout your organization is to have members of the procurement team regularly rotate through different functions in the business.
All successes, no matter what size, are worth celebrating because doing so will help raise the profile of procurement throughout the business. The first step is to understand what channels are available for doing so. This may be via posters on the office wall, collaboration tools such as Slack, or the company intranet.
Decades ago, procurement generally had only one kind of success story to share: the achievement of cost savings. While this is important and remains procurement’s primary KPI, it simply won’t resonate with people as much as success stories in those areas that are now under procurement’s wider umbrella of value-addition: risk mitigation, social procurement, green procurement and more.
If your team doesn’t have the time or the skills to get this done, consider tapping one of your organization’s communications professionals on the shoulder to get their journalistic expertise in celebrating procurement’s success on a regular basis.
Increase influence and stay relevant
Procurement can increase its influence by reshaping the way it presents itself to the wider organization. This means re-aligning targets and KPIs, speaking the language of the business, and celebrating success to show others the real value that procurement can deliver. Without influence, procurement can’t hope to stay relevant in a constantly changing business context.
In episode 25 of The Sourcing Hero podcast, Mike Morsch of CDK Global shares insight into this topic as well. In this conversation, Mike shares how to increase procurement’s internal influence within an organization and what doors are opened as a result. Take a listen for some more key points on how to internally elevate procurement’s influence.
Visit Una’s resource center for more thought leadership on the big issues facing the procurement profession.