Many have opinions on the future of Procurement, and the start of a new decade has inspired many to take a look back to shape what their future will look like. This has contributed to many takeaways, but among them all, I think the most looming is a sense of uncertainty. We are undoubtedly heading towards a crossroads in Procurement, with only a small number of Procurement organizations prepared to handle the complexities of the future. These well-equipped organizations have embraced the factors contributing to this crossroads for Procurement and found ways to overcome these challenges proactively. In an effort to help address these challenges, here are 5 ways you can boost your legacy Procurement function and increase your influence within your organization:
1. Understand Your Maturity
For some, you may already know the level of maturity for your organization, but for others this is the first step in gaining efficiencies, building your business case, or revamping your organization or team. The important thing here is to remain as objective as possible, whether that means an independent auditor or consultant evaluation or by taking a hard, honest look at your processes. An independent, objective assessment is your best bet, but you can familiarize yourself with thought leadership and industry best practices and compare your standards and practices, but this requires objectivity that might be difficult. If you understand how your team fares from what most considered a leading best practice, you can begin to work on process improvements and efficiencies needed to take that next (or first) step.
2. Know Your Metrics
This may sound like a no-brainer, but understanding your metrics and how you measure performance is important and critical to your success. This means measuring performance of your suppliers based on KPI’s and service levels, tracking your invoices and PO’s, tracking your own team’s cycle time, et al. You need to know how you and your organization measure success and find ways to be more strategic. For some this is avoiding/eliminating spot-buys or consolidating your supplier list, but you can expand and generate more opportunities to be strategic. Examining your metrics is a great place to start to identify initiatives and better understand how your team or organization functions (this should only be the tip of the iceberg!).
3. Tighten Up Policies
Once you’ve reviewed your data, it’s probably time to start reviewing your policies. If you have a strong grasp on your numbers and metrics, then this might just be a refresh, but if your data and metrics are in disarray or unorganized, now is the time to strengthen your polices. This step might be tough without support from the top, but the goal of a policy refresh should be to identify gaps in your current state and then updating and adjusting accordingly. Moreover, now is the time to enforce your policies. Don’t let your team, the business team, or suppliers deviate from any policy you’ve established. However you chose to do so is at your discretion, but accountability during every step in this policy refresh is vital to continued success. Policy and procedure is where it all starts and strong policy and procedure eliminates any potential for gaps and ensures compliance.
4. Build Your Brand
This one may need a little finesse, but ultimately you want to present an image of a well-oiled machine with the flexibility to address more complex buys or initiatives. This may just be an internal rebrand or a soft re-org or this may be the first step in gaining senior level buy in. In any event, whether you’re rebranding your team or just beginning to build your brand, start smaller if you can. Pick a category or line of business and test out new policy or procedure, observe what works and what doesn’t, and then try to implement on a larger scale. Some may argue against this due to complexities or nuances of certain categories or calling this low the hanging fruit, but starting small lends you the flexibility to be creative and test the waters. The purpose of this exercise is not use a small sample size to apply all your new strategies, but to test policy and procedure or launch small updates to existing process. In essences, this is where you can start to grease the wheels while you build your brand or business case for larger influence.
5. Be Proactive and Collaborative
Like most aspects of our everyday life, being proactive is always a wise decision that can eliminate any stress further down the road. But, when it comes to Procurement being proactive can lend credibility within your organization. Taking the next step or reviewing your policy and procedure before any fire drills shows you are always thinking ahead, planning, and being strategic, an ideal image needed for any Procurement organization. Additionally, we need to be willing to adopt cross-functional methods or solutions from outside our bubble to embrace the complexity of what the future for Procurement looks like. Reaching out to other teams within your organization shows you are willing to collaborate and are open to incorporating some practices from outside Procurement. Always be on the lookout for opportunities to collaborate and be proactive and don’t accept stagnation for your team. If we’re always looking for continuous improvement, we won’t fall back into our old habits.