Secrets of Highly Influential Procurement Teams
As we approach the end of the year, it’s natural to reflect on what we have accomplished and what we’d like to do more of or do better next year. These challenges were top of mind as several hundred procurement leaders gathered for a recent webinar: Benchmarks and Best Practices of High Performing procurement Teams, hosted by Spend Matters and JAGGAER.
Procurement experts Pierre Mitchell from Spend Matters and Brett Cornell from JAGGAER filled the hour with informative and actionable suggestions for ensuring that organizations recognize and appreciate the value procurement teams provide.
“Efficiency funds effectiveness,” Mitchell said. “The biggest cost is often the opportunity cost of wasting resources on tasks that don’t create value.”
Procurement’s Growing Influence
Mitchell and Cornell reviewed a procurement maturity model and encouraged participants to align their goals to help push them to the next level of maturity. Doing this requires having access to the right information at the right time. That’s where technology comes in.
- Reacting – Manual and tactical. Little if any forecasting. Employ technology where you can to support your growth.
- Anticipating – Using technology to get ahead of the curve with more information. Start to build better relationships with business partners.
- Collaborating – Deeper business knowledge. Procurement involved earlier in business critical conversations. Look for opportunities to transform the business.
- Orchestrating – Transforming the organization, not just the procurement process.
“The fundamental question is: Where do you want your people spending their time?” said Cornell. “I would rather have my team exploring alternatives based on the data they have already analyzed rather than trying to gather and cleanse data.”
Defining and Demonstrating Procurement’s Value
As the definition of ROI evolves to include maximizing profits and revenue, balance sheet improvements and reduced tax expenditures, the role of technology becomes even more critical. Procurement often contributes to these areas, but doesn’t get credit for it. Savvy procurement teams constantly evolve their scorecard to reflect what they are actually doing and that these things are integral to the business.
“What are the CEO, Board and shareholders interested in?” Mitchell said. “Procurement needs to get involved in and support those things. This is bigger than purchasing. We’re here to enable the business.”
Mitchell and Cornell offered the following tips for measuring value:
- Push the envelope and find new opportunities with stakeholders.
- Benchmark externally for approaches/solutions.
- Build business case with broad metrics and capabilities.
- Implement low-risk and high ROI deployment.
- Replicate across other stakeholders to expand your sphere of influence.
- Demonstrate value with a scorecard that includes KPIs and capability metrics.
By following this approach, procurement teams can elevate their role to one of trusted advisor and increase their spend influence while also delivering measurable top-line and bottom-line impact to the organization. When that happens, job security is sure to follow.