There is a gap of more than 20% between procurement's estimation of its worth and the way the department is viewed by the rest of the organization, and it's a bad gap. In a survey we conducted in the latter part of 2012, procurement and other organizational personnel sounded off on what value procurement departments bring to the organization. In comparing the responses, it was very clear that procurement departments value themselves much higher than they are actually rated.
Percentage breakdown of procurement's perceived value to their organization

The latest whitepaper from that survey -- available here -- discusses those findings and displays them across a handful of charts. The gap -- the disturbing 21% gap -- is made apparent when the responses from procurement personnel rating their department's work as either "excellent" or "good" compared to those responses from those outside of procurement and their ratings of procurement's work as "excellent" and "good". There are a number of reasons that could explain away the gap like taking pride in one's work, or difference in sample size (the number of procurement personnel surveyed was approximately triple the number of non-procurement personnel). There is one statistic, however, that likely explains the gap and highlights not only its importance, but how simple it is to fix.
Percentage breakdown of organizational department's perceived value of procurement

The last section of the whitepaper discusses whether or not those procurement departments are marketing themselves throughout their organization. An overwhelming majority stated that yes, they did market themselves, but the reported marketing methods were less than spectacular. Almost all claimed "reporting" as a marketing method. Reporting is not marketing -- reporting is so crucial to procurement's daily duties and its relationships with other organizational departments that it ought to be, and in most cases is, a required duty. The next most popular marketing method? Transparency. Simply keeping people in the loop about what you and your department are doing. Transparency is another one of those methods that is so critical to a department's everyday functioning that it shouldn't be considered marketing.

Outside of those two borderline-required duties, the only other marketing methods mentioned were "training" and "stakeholder involvement", making it very clear that procurement departments do not consider proactive marketing of their services internally as a priority. This is likely the cause of the value perception gap. The majority of non-procurement respondents simply had  no idea what their organization's procurement department was doing.

As the procurement industry changes, and the procurement departments within it struggle to keep up, effectively and proactively marketing a department's strengths, services, and successes is proving to be critically important. Source One has the experience and skill to work with your procurement group to better market itself if you're feeling a bit of a gap within your own company. We will also detail some internal marketing "how tos" in the July newsletter, which you can sign up for here.

To see the other whitepapers from this series, visit Source One's research library.
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Nicholas Hamner

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