Procurement departments have boundless value-adding potential. They can and should occupy prominent, strategic roles within their organizations. For years, however, many have earned negative reputations due to misconceptions about their role. Still perceived as tactical, the department struggles to gain executive buy-in and reach its full potential.
On Day 4 of ISM2018, Source One Director Diego De la Garza joined Global Business Consultant Donna Chappas to address this issue in Overcoming Procurement's Internal Image Problem.
Throughout the presentation, both Procurement thought leaders offered strategies and suggestions for Procurement departments looking to change the conversation and accept their rightful leadership role.
Thanks to forward-thinking consultants like the team at Source One, Procurement's role has evolved considerably in recent years. Though 80% of CPOs still consider cost reduction their primary objective, more teams than ever have committed themselves to providing value well beyond cost savings.
Typically, however, Procurement's brand still stands in the way. Its strategic value is rarely obvious to executives who still associate the department with little more than purchase orders. They support the department more than ever, but they're still not fully aware of what its success can mean for them. It's up to Procurement to sell itself by building a new, more impactful brand identity.
Where should Procurement start?
De la Garza and Chappas suggested attendees start by developing a clear, concise, and consistent vision. This vision should focus on enabling the business by building strategic supplier relationships, reducing costs across the supply chain, and making consistent efforts to optimize operations.
Procurement needs to emphasize that this mission is not theirs alone. By showing empathy and demonstrating a service attitude, Procurement can better align itself with internal stakeholders and become a trusted adviser. Many of Procurement's past issues have come from the perception that the department is closed off. By familiarizing itself with the language and objectives of other departments, Procurement can more easily establish partnerships across departments.
Simply put, the word 'savings' doesn't appeal to everyone. Historically, it's given many internal stakeholders the (mistaken) idea that Procurement is purely a cost-cutting function. Changing the conversation to focus on value, budget optimization, and risk mitigation can provide foundation for changing the conversation around Procurement itself.
Chappas and De la Garza concluded their session with a Q&A session. The supply management professionals in attendance joined the hosts in a spirited discussion that touched on Procurement Transformation, recruiting, and long-term change management.
Want to learn more about rehabilitating Procurement's reputation? Contact the process optimization team at Source One today.