As the business world has evolved, the procurement profession has evolved with it. Today, procurement pros are faced with having to demonstrate and measure the value that they are bringing to the group. They want to stand out as the most valuable player (MVP) in the organization. Doing that successfully helps the organization and the procurement function alike.
“There was a time when we were trying to convince the organization that, in terms of cost savings, procurement was a good thing,” Chris Sawchuk, principal and global procurement advisory practice leader at management consulting firm The Hackett Group, told EBN in an interview. “It's been a double edged sword for us. As you do that and are successful with it, the organization wants more.” Sawchuk recently spoke presented some advise on raising procurement's value to the organization at the Procurious Procurement Boot Camp.
Limiting the procurement function to cost savings allows for limited value over time. “They need to consider, with the ways that they have access to supply chain, how to create other types of value that will help enable them to do other things,” Sawchuk said.
To really emerge as MVPs of the organization, procurement people have to think even more creatively. They need to position themselves within the organization as trusted business advisors. In consulting with top leaders in customer organizations, Sawchuk found that most wanted procurement to function more deliberately in this area. “I have been used to people looking for something more tangible, but it became clear to me that that priority is an enabler,” Sawchuk said. “Once a procurement person can establish himself as trusted advisor, it will enable them to do a bunch of other things that they were invited to be part of.”
Taking the role of trusted advisor takes time and patience:
- First and foremost, procurement needs to deliver consistently on the fundamentals: cost, quality, and delivery. “That's the reason we exist,” said Sawchuk. “You always have to start with the basics.”
- Next, procurement has to take time to build and maintain relationships. That means spending time with people and seeing them face to face.
- In addition, procurement has to focus on hiring the right talent. “You have to ask yourself whether or not you've got the right type of people to develop a trusted relationship?” Sawchuk said.
- Finally, procurement organizations need to value agility. “Procurement needs the ability react quickly, be creative, and even be predictive,” Sawchuk said. “The department needs to flex with the organization.” Although standards are in important, it's also important to react to the unique needs of the organization and its individuals, he added.
The good news is that technology evolutions allow procurement to work smarter rather than harder. In the supply chain and sourcing/procurement spaces, a variety of products have become available to help the organization to react in a customer centric and transparent manner. “The reality of being able to react much more quickly to demands of the customer becomes much visible, fast, and doable in those kinds of environments,” Sawchuk said.
How is the role of procurement and supply chain evolving in your organization? Let us know in the comments section below.
— Hailey Lynne McKeefry, Editor in Chief, EBN