Today’s article is the second of two articles from a report that we recently published, entitled, Collaborative Procurement: Using Relationships to Drive Influence and Results, sponsored by Puridiom and available for free download by clicking here.
In 2015, Chief Procurement Officers (CPOs) are pressured to drive more value from their departments than ever before as they attempt to stretch the limits of their organizations while also maximizing the relationships they have developed with suppliers and internal stakeholders. Procurement’s ability to impact business processes, relationships, and results will certainly continue in the future, but the depth and breadth of that impact will depend on each organization’s ability to master its processes and technologies and upon its ability to collaborate with key internal stakeholders and suppliers, alike.
To be fair, CPOs and procurement teams have been moving mountains over the past few years, particularly as the expectation to “do more with same” has persisted beyond the Great Recession. But in order for them to elevate the enterprise to the next level of performance, they must collaborate with trusted partners inside and outside of the enterprise. With collaborative procurement, overworked and understaffed procurement teams can find valuable partners within AP/treasury, product development, legal, line-of-business, and suppliers, and extend the value of procurement beyond its four walls. Common goals, shared information, linked processes and systems, and above all, mutual understanding, can enhance the value of procurement’s relationships inside and outside of the enterprise.
Our recent report, Collaborative Procurement: Using Relationships to Drive Influence and Results, details the stakeholder relationships that CPOs and procurement teams need to forge and the recommended strategies that can help them improve these relationships. Some of these recommendations include:
- Embedding procurement staff within the business, which can help CPOs extend procurement’s reach and value within constituent departments. In doing so, it can help them learn more about stakeholder needs and projects, build relationships from the ground up, and enable procurement to get involved sooner in the process where they are more valuable.
- Gaining alignment on objectives and metrics with different stakeholders, which is critical for CPOs and procurement teams as they become engaged with different stakeholders that often prioritize objectives and measure success differently than the procurement team. CPOs and their counterparts need to understand what is important to each other and how they will measure success, otherwise the relationship may be compromised as it begins.
- Sharing procurement data with trusted stakeholders. That said, it is in the CPO’s best interests to share data with their trusted stakeholders – not just to show good faith, but also to ensure that all parties are on the same page. For example, if procurement is trying to sell the point to the manufacturing team that one of their preferred suppliers is under-performing, procurement can make a stronger argument that a change needs to be made, either in performance management or sourcing, with data than with mere observations.
These are just some of the recommendations we provide in our report. Want to learn more about how procurement teams can collaborate with internal and external stakeholders? Readers can download the full report by clicking here (the report is free to download, but registration is required).
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