It's important for companies in need of a sourcing boost to look at their potential issues from each perspective, considering the processes in place, but also doing so through the lens of stakeholder involvement. This hybrid approach can guide a company to a better perspective and greater efficiency.
Polling the stakeholders
Spend Matters recently delved into the question of whether procurement operations should be centralizing their processes or decentralizing and delegating authority. Rather than coming down on one side or the other of this debate, the news provider suggested that each business will have its own ideal mixture, and added that finding this balance involves speaking with important stakeholders. These individuals, the ones who deal with the procurement department on a daily basis, will know when something is awry.
For example, if a leader in another part of the company deals with sourcing but doesn't have someone to consistently communicate with in that department, it's a sign that the structure needs a change. Organizational leaders have a perspective on sourcing's role in the company's big-picture performance and, subjective as it is, this insight may be more useful than a seemingly more objective numerical measure of procurement efficiency.
Sometimes, a lack of satisfaction or visibility at the highest levels is an indication that a company needs to move toward a more tech-enabled procurement model. Aalto University's Katri Kauppi and Spend Matters U.K./Europe Director Peter Smith both told the news provider that when companies invest in more technology, they can create a universal view of procurement that gives access and knowledge, even when decision-making has been centralized.
Of course, creating a bond between company leadership and the sourcing team isn't just a one-off event to be carried out when it seems like things are going wrong. Ideally, these two groups will frequently see eye to eye, meaning they can move forward with unified strategies and ideally never fall into the kind of operational trouble that would call for a strategic rethink. In an interview with Supply & Demand Chain Executive, supply chain researcher and expert Andrew Bartolini explained that chief procurement officers should use frequent conversations with the rest of the C-suite team to set a unified direction.
Ideally, processes will be visible to procurement leaders, and these individuals will be available to speak with the heads of other departments. When there is a general well of knowledge around what the sourcing team does and why, it's easier to determine whether a change would improve things. Bartolini suggested that procurement leaders should add to their insights by speaking not only with their internal counterparts in other departments, but also with supplier executives. When sourcing operations are led by individuals with wide horizons and lots of information, there's less room for confusion and more potential for growth.