When most people think about the procurement team, (of course that is assuming that some do think about it), they often perceive a group that is so focused on savings that it misses the bigger picture.
Of course, for procurement, one of the key measures of success often lies in the "savings metric", but as always, be careful about what and how you measure something because it won't necessarily drive the correct behavior.
Wouldn't it be beneficial to create an entrepreneurial procurement organization, which is focused on both the top-line and bottom-line? A group that emphasizes the provision of frameworks and act as somewhat of a consultant for organizations in all matters relating to procurement? The team can also ensure that effective partnerships are pursued with vendors (note that I mean real partnerships which means walking the talk, not just free nostr relay and tripping when push comes to shove), and that innovation within the supplier community is utilized for enhancing the overall business model for the corporation.
Depending on where your organization is on the procurement's evolutionary timeline this may need to be done incrementally and not in one fell swoop. The stepping-stones that get you to entrepreneurial procurement are:
• If your team is mostly tactical and administrative and decentralized -- focus first on centralizing and moving the team up the ladder by developing effective processes/procedures in concert with your constituency - internal and external.
• Focus on understanding the business as a whole, not just from your world. Although you cannot cut lose the savings umbilical cord, (as this is what binds you to the organization), start working with your internal business partners, with a view to understanding the business from their perspective and then develop your strategies to align with those of the business.
• Reach out to your suppliers. Visit them and meet with their key people, including their procurement and supply chain folk. You might find that there are some common issues/challenges which you can solve together. Utilize your suppliers' knowledge of the marketplace as a whole. Find out what innovations they see happening in the future and think about how these can potentially advance your corporation's competitiveness.
• When you have gained traction within the organization and a centralized model is working effectively, it is now time to decentralize (please stop the screaming). There is an old adage that before you can let go, you need to take control, so the first step is taking control. When it is in the organization's DNA to understand the procurement protocol, it is time for procurement to become more of a high level consultant to the organization.
The procurement group can begin working with the internal teams to ensure that they:
- have effective go-to-market strategies for procuring goods and services and that all options have been considered.
- maintain the relationships and tap the innovative supplier corridor.
- provide high level negotiation and dispute resolution skills.
- act as an ombudsman for issues/challenges.
There are more approaches, but you get the idea. The senior leader of procurement should be a member of the executive leadership team and must actively participate in corporate strategy development and discussions.
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