“The whole notion of collaboration, both internally and externally, I think, is something that, in procurement, we have to be really religious about. We have to be really militant about it, because if we’re not, I think the forces that want to separate are greater than the forces that want to combine.” – Thomas Linton, CPO Rising Hall of Famer
Collaboration
Over the past couple of years, collaboration has taken on greater meaning within the business world, offered up as both a tool and a solution for the hyper-kinetic world where shortened product lifecycles, linked processes, global supply chains, and other forces rule the day. But collaboration is not mere hype; in fact, Ardent Partners research consistently finds that business leaders regard it as a top strategy for getting enterprises and procurement teams to the next level of performance. With so many stakeholders involved in the production of a widget – i.e., product development, procurement, suppliers, legal, accounts payable (“AP”), finance, treasury, and others – it is absolutely critical for procurement teams to collaborate with business stakeholders at every stage of the process. Indeed, the earlier that procurement gets engaged in a sourcing event, the earlier it can begin to influence stakeholders, align and link processes, pull more spend under management, and realize greater value for the enterprise. Put simply, enterprises and procurement teams can no longer afford to go it alone.
The new reality for enterprises, in general, and Chief Procurement Officers (CPOs), in particular, is that they are constantly asked to do more in a marketplace that has taken on new levels of complexity and velocity. In order to meet the organizational imperative of achieving better results faster and with fewer resources, the procurement team must find new avenues to add value to the enterprise. This focus on achieving better results without additional resources forces the procurement team to find innovative methods to meet their objectives. Meeting department objectives can be difficult in this era of restricted resources, but the procurement team can be well-positioned to achieve its goals.
2021: It’s Time to Engage
In 2021, many CPOs and their teams will be asked to deliver bigger results in the face of sizable uncertainty. To succeed, procurement leaders must follow the courage of their convictions as they start to reframe the new pandemic and post-pandemic procurement environment and how it engages and operates amidst change and uncertainty.
Engage the CFO
When businesses hit tough times, they look inward. For example, when sales and revenues are or appear to be at risk, executives place more emphasis on the things that they can more directly control. This is what happened during the great recession (2008-10) and this is what happened in many industries in 2020. Certainly many companies have performed great and the stock market is still going strong. But, many other companies struggled and continue to struggle. It is unlikely that the stock market doubles again this year. Many experts believe that the general market exuberance we see now will not continue. If, and when it stops, stocks will fall and a new economic reality will set it. When it does, the CFO’s Agenda and the CPO’s Agenda will converge.
If you’re not already, now is the time to get on the same page as your CFO and get procurement and finance back in the saddle again.
Engage the Business
When the pandemic hit the U.S. last March, I had discussions with multiple CPOs about the impact and I’d honestly say that about half of these executives were more focused on getting their teams accustomed to working from home, than issues within the supply chain and general operations.
As we move deeper into 2021, many business leaders are struggling to manage their teams in the widely-distributed work from home manner that exists today. I don’t need to explain all of the problems that exist in managing a remote team. What I can tell you is anytime a strong, reliable partner can bring (1) domain expertise (2) strong project management skills (3) financial analysis support and/or (4) great communication to the table, they will be perceived as a big value-add, particularly in the current state of operations.
Spend a week planning how to target key business stakeholders next week and begin the outreach on March 15!
Engage Product Teams
The global recession is a constant reference point for me because it helped define the expanding role of procurement over the last decade. Twelve years ago, procurement was focused on controlling costs and driving savings. That opportunity remains, but there’s also the opportunity to become more proactive and strategic. If you’re not currently engaged with your product teams, now is a good time to start.
Figure out what resources you can commit and then make the pitch. Although we are more remote, it should be easier to get in front of your product team leaders. Collaborate with them to define the best way that you can support what they’re doing. Then simply go from there.
Conclusion
2021 may once again be a year of haves and have-nots, but no matter which side of that line you’re on, procurement can play a big role. But… only if it’s in the game and not watching from the sidelines. 2021: It’s Time for Procurement to Engage.
RELATED RESEARCH
Speaking on engaging different partners….
Ardent Partners’ AP Metrics that Matter in 2021 eBook
is a great way to engage finance and accounts payable. Get it while it’s still available.
