Source One's new whitepaper series offers insights and reflections from a number of Supply Management's most notable thought leaders. Taking a look at Procurement Transformation through various lenses, they provide an overview of the conversation surrounding the subject and offer strategies to organization's at every maturity level. This week, we're taking a closer look at Part 4 of the series. Titled "The Road Ahead," it center on next steps for post-Transformation Procurement teams.
Source One Director Diego De la Garza opens the concluding section of "The Road Ahead" by discussing the "assimilation phase" of a Procurement Transformation. This is the period, De la Garza writes, in which "Procurement has reached peak potential and executive buy-in." Riding high on the momentum of a successful Transformation, this stage is where Procurement can showcase its value and solidify its new place within the organization.
De la Garza writes, "I'm a firm believer that perception is reality. Whatever state your Procurement department is in, its perception across the organization will have a direct impact on its performance." He goes on to suggest that just because a Transformation has taken place doesn't mean leaders from internal business units have transformed in how they view Procurement. If certain business units have long considered Procurement a tactical function, they might prove hesitant to abandon that notion. Relying on their old misconceptions, they may neglect to proactively seek out Procurement's support.
"In short," De la Garza remarks, "[Procurement] will need to manage every business unit's perception, and they'll need to do so in different ways." To accomplish this, he recommends developing communication plans focused on "Enablement." Procurement should work to inform stakeholders from each business unit how exactly Procurement will support them in reaching their objectives. Delivered properly, this messaging should encourage them to engage Procurement earlier and more often in search of strategic support.
De la Garza emphasizes the importance of "translating" Procurement's messaging into the language of other business units. For example, the function should speak in terms of budget optimization to better encourage collaboration with Marketing. Marketing, in particular, often hesitates to align itself with a Procurement team that talks in terms of "savings." By familiarizing itself with the metrics and goals that matter to Marketing, IT, Legal, and other departments, Procurement can better frame itself as valuable asset.
It's also essential, he suggests, for Procurement to manage its perception within the department itself. De la Garza recommends first developing an impactful value proposition for the department. This mission statement should align with the organization's core values and resonate across every business unit. Additionally, embracing digital innovating and hands-on talent management can help ensure Procurement's value is recognized and articulated both within the unit and throughout the company.
Procurement, he concludes, cannot afford to take its perception for granted. Building Procurement's reputation and empowering it for success requires constant care and calibration. De la Garza describes the importance of this process, "Without momentum, a valuable, strategic department can easily find itself faced with disengaged business units and disappointing results." No one, whatever their perception of Procurement, can afford this for long.
To read more about Procurement's post-Transformation journey, check out Part 4 of Procurement Transformation: Industry Perspectives.