“We want to collaborate with our internal stakeholders, but at the end of the day we cannot tell them to buy into our sourcing strategy.”
How many procurement professionals have spent their careers with this echoing loudly in their minds?
Procurement professionals become indoctrinated into the profession with messages such as:
“You have to take the internal customer along with you”. “You have to persuade them”. “You have to get their buy-in first.”
Why is this the case?
Surely procurement “owns” the procurement process and must therefore have the authority to drive procurement strategy. Furthermore, whilst these statements are in themselves not wrong, all speak to the same problem:
They emphasize a core helplessness within the purchasing profession caused by the absence of a clear and unambiguous endorsement from senior leadership that says what procurement is mandated to do.
One reason for this may be that procurements role is frequently not associated with the key business goals or one that must be “done right”. Instead, it is perceived to be about support and cost reduction.
Procurement itself suffers from a “support mentality” and frequently defines itself as a “support function” whose status is derived by the size of money it spends and the amount it saves.
Procurements dilemma is to lead or support and to lead effectively procurement needs a clear mandate to define its role.
Procurement is not optional. If you are in business then you are in procurement, and procurement has three key roles in any business:
- Strategic: to drive and support business strategy to enhance and maintain its competitive advantage
- Functional: to drive effectiveness by developing and maintain the supply markets to meet the business needs for sustainable success.
- Transactional: to drive efficiency by providing the systems and processes to optimize of day to day procure to pay transactions.
To be successful companies must optimize procurement by positioning it strategically within the business, raise awareness of its importance across the business and harness the talents of its workforce to deliver tangible benefits.
Class leaders have no doubt about procurement’s role, and their goal is to excel at it.
Nuff said…