What is Procurement?
That’s a question that I’ve answered often in my career, especially when meeting new people. The answer that I wanted to respond with is:
“Procurement helps companies strategically assess and manage their external spend, and find new and innovative ways to partner with their suppliers and drive bottom-line results.”
However, in an effort to simplify things, I have always responded with:
“Procurement negotiates large contracts and saves a company money.”
That’s a pretty big gap in my personal belief of Procurement and its value, and what I believed others would understand. So what is Procurement? What drives and motivates Procurement teams? Finally, what is the best way to partner with them?
After a 15 year career in indirect Procurement, in corporate and consulting roles, I took a leap: today, I’m helping launch a new technology platform designed to address specific issues that I had experienced during my career. As VP of Zylo (the leading SaaS management solution), I’m on the other side of the buyer-seller table. I am not uniquely qualified to answer the questions above.
How Does Procurement View Themselves and How Can You Get the Most Out of Your Partnership?
To understand what drives Procurement, you first need to understand what the most sought-after “title” is, for any resource or team: Trusted Advisor. It’s a term that I used and heard throughout my time in Procurement-related consulting and corporate roles.
Why is that? It’s because the heart of what Procurement wants to deliver within an organization is value. More often than not, the perception from outside teams is that Procurement is solely focused on savings and will negotiate pricing just for the sake of negotiation. While organizational savings is a very important part of what Procurement is driving, they also drive toward a much more strategic vision than that. What does that mean?
Procurement strives to be a full-service concierge for the business. They not only want to help execute a deal, but they also want to guide the deal through the corporate process, while hopefully learning enough about the deal to provide experienced guidance to the business teams around not only pricing, but requirements definition, demand management, and process definition and efficiency. In total, Procurement wants to be the one-stop shop for all-things related to the buying process.
How can you work with Procurement? A few key steps to success:
- Engage them early: This might be easier said than done, but the earlier you engage, the easier Procurement is to work with, and the more value they can provide. Engaging them late in your decision process leads to rework and the dreaded “red-tape” collaboration, where they’re looking to ensure the proper process was followed rather than providing strategic input.
- Make them a part of your team: This plays into engaging them early, but inviting your Procurement stakeholders to key leadership meetings, and making them both accountable and responsible for work within your function drives their level of input, and sense of belonging to your team. Upcoming budget review meeting? Invite them. Early spit-ball sessions around new technologies or solutions? Invite them. Tough conversation coming up with one of your largest partners? Invite them. The returns on this level of involvement are impactful.
- Give them responsibility: Once you’ve engaged and made them a part of your team, put them to work. Nothing says “trusted advisor” more than your trust in them to complete key components of your buying processes. This allows you to free up availability on your own internal team, and outsource non-core activities to another team that is excited to take them on.
Stay tuned for future posts about what motivates Procurement and the best way to partner with the team.