How to Improve Stakeholder Relationships in Procurement

Tips on how to improve stakeholder relationships to increase cost savings, improve efficiency, and enhance communication and innovation.

By Hugo Britt | October 5, 2023

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Procurement can’t operate in a vacuum. Far from being an isolated function, procurement sits at the center of the organization with touch points reaching every part of the business.

In a perfect world, the procurement manager has a smoothly functioning business stakeholder network where input is sought, needs are met, and everyone is satisfied.

Unfortunately, this isn’t always the reality.

Why some stakeholders refuse to engage with procurement

Picture this – you have a plan to slash the emissions of your company vehicles and reach out to the fleet manager to get the conversation started. Weeks later, she still hasn’t returned your emails. Without her cooperation, the project will never get off the ground.

There are several reasons this person may hesitate to engage with procurement. Perhaps she has had a negative experience with procurement in the past that led to a project being blocked or delayed. She may see procurement as ineffective, unimportant or irrelevant to her personal and business goals.

Maybe she’s a maverick at heart, preferring to bypass or work around procurement rather than follow policies and processes. Or maybe she fears procurement will force her to change her network of preferred suppliers.

Improving stakeholder relationships in procurement can increase cost savings, improve efficiency, and enhance communication and innovation.

How to improve stakeholder relationships

Whatever the cause, it is clear that procurement needs to take steps to repair trust and improve the relationship if they hope to meet functional goals.

Benefits of great stakeholder relationships include increased cost savings, efficiency improvements, earlier engagement, enhanced communication, collaboration, innovation, and continuous improvement.

Here are some strategies to get those relationships back on track.

Introduce yourself

Sounds easy enough, right? Don’t wait for the other party to take the initiative – remember, procurement may be low on their list of priorities. Pay an informal visit, book a meeting, or a video call if they’re not in the office. But nothing beats an in-person introduction.

Speak their language

Peppering your conversation with procurement lingo won’t win you any friends. Instead, learn terminology that resonates with different functions, such as marketing, finance, or sustainability.

Understand stakeholder needs

How can you help others if you don’t know what challenges they’re facing? Conduct a thorough analysis of the needs, concerns, and expectations of stakeholders. Ask them about their priorities and pain points, then connect the dots to discover where procurement can help.

Open communication channels

Maintain open communication channels with stakeholders to keep them informed about procurement processes, policies, and any changes that may affect them.

Think beyond email and tailor your communication style to different people – some may prefer a phone call, an in-person meeting, SMS, or instant messaging.

Engage stakeholders early

Procurement professionals complain about being engaged too late in strategic decisions, but this works the other way around, too. Involve key stakeholders in a procurement decision in the beginning to seek their input and feedback.Approaching them too late is both ineffective and frustrating.

Form cross-functional teams

Want to forge a closer relationship with stakeholders? Consider joining a cross-functional team to work on a short project together. This will dramatically boost collaboration, efficiency, and empathy as different functions get to know each other.

Raise the profile of the profession

Launch an internal PR exercise to raise awareness of what procurement does, who is in the team, and ensure stakeholders understand the value procurement can bring to the organization. Celebrate successes! 

Customize reporting

If you have the capacity, consider providing customized reports and dashboards to different departments to help them track procurement activities, spending, and savings relevant to them. Tailor the information to meet their specific needs, and (as above), be sure to use language that resonates with them.

Benefits of great stakeholder relationships include increased cost savings, efficiency improvements, earlier engagement, enhanced communication, collaboration, innovation, and continuous improvement.

Conflict resolution

Establish a process for resolving conflicts or disputes that may arise between procurement and other departments. Ensure disputes are addressed promptly and fairly.

Establish a feedback loop

Continuously seek feedback from internal stakeholders and use it to improve procurement processes. Acting on feedback is an excellent way to demonstrate a commitment to meeting their changing needs.

Get stakeholders excited about positive change

Not every stakeholder will be interested in metrics like compliance and cost savings, but you may be able to get them interested in projects that lead to positive change such as eradicating modern slavery, boosting sustainability, diversity, or social objectives.

Technology

Make sure procurement software and tools are easy to use, with excellent UX to boost engagement.

Senior leadership support

Secure support and buy-in from senior leadership within the organization. When top executives champion the procurement function, it can help convince even the most stand-offish stakeholders to collaborate.

Conclusion

No matter the circumstance or current state of your stakeholder relationships, it’s clear that procurement (and the organization as a whole) benefits greatly when these entities are working together. In order to build and maintain a positive relationship with stakeholders, it will be important for procurement managers to start up conversations early, listen effectively, show respect and understand their needs.

If you need assistance with improving stakeholder relationships, contact the procurement experts at Una today.

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