Procurement: the Cinderella function
It has sometimes been described as the Cinderella function within an organisation, and indeed, procurement professionals have long been seen as the ones ensuring the continuous supply of pumpkins, a generally thankless task. But like Cinderella - rather than Jack the Giant Killer - procurement branding is increasingly being recognised as a means to put across the value of the function from being simply a 'bean counting' exercise to a 'belle of the ball' scenario.
The only difference between Cinderella and a procurement professional is that there won't be a Fairy Godmother to make it happen. The change will have to come from within, firstly with the realisation that the procurement function needs to know its own measurable value to both the bottom line and the top line, and then go about branding itself accordingly.
In journalism, every article must cover the 'who, what, where, when, why and how' of a story. The same can be applied to procurement professionals, with a small caveat added to the last word that reflects how the profession’s function is generally still seen, and that is rather not 'how' but 'how much?'
This bottom-lining does procurement professionals a disservice because who, from all of the other departments - IT, Sales, Customer Service, HR or Marketing - has a bird's eye view of the entire spectrum of an organisation, and who better to know the difference between simply purchasing (a mechanical exercise) and procurement (a long-term strategy). The former, to return to the journalism analogy, incorporates the 'who, what, where, when' and the 'how much'; all of which are the technical bones of any news story as well as any supply contract.
What is becoming increasingly important however with today's focus on sustainability, plus ethical and environmental factors in the supply chain is - like in any news story - the 'why', or, the motive behind all actions taken. Why procurement makes the decisions that it does and why those decisions are important to its organisation's brand, as well as its bottom line, need to be not only the primary focus, but must also be communicated so that function can be recognised as just as vital a strategy as marketing, sales or customer service.
Coming in from the cold
- Procurement is often the only function that sees across the entire spectrum of an organisation because of its interaction with all stakeholders inside and outside, in the marketplace, current trends and opportunities, all along the supply chain in fact. A procurement professional can see where a supplier's business is headed and act accordingly so that his own organisation won't be left with a gap if caught by surprise. Through these contacts, procurement can also keep an eye on the competition and provide its own organisation with market intel.
- To enable recognition of its intrinsic value, procurement needs to decide what its own brand image is other than cost savings, or worse just being 'the ever-present necessary evil', something like 'Buy your way to profit' as used as an example in a recent LinkedIn article on the subject.
- Evolving such a brand is also seen as necessary to attract more young talent to the profession. There are even some suggestions out there that go as far as suggesting changing the name of procurement professionals to 'alliance specialists' to reflect the growing agility of the role. Others in the industry feel that rather than ditching the name of the profession, re-inventing its nature and function is the more dignified way to go.
- Firstly, before the name or nature of the profession can be altered, procurement must look at itself and decide what it truly is and where it's headed. What sets it apart from other functions within and organisation? What value-added does it bring to the business?
- Show how flexible the function can be. Factor in the unexpected and how the supply chain can survive by having a contingency plan in place should there be a danger of a link being broken. This will reduce any risk factors from rigid approaches and keep the organisation functional in the midst of a crisis.
- Know the organisation's brand and align procurement with those values. It's no use a business donating to UNICEF and at the same time unwittingly procuring supplies through possible child labour simply based on cost factors. Be seen as an enabler of the brand by doing the homework. Public scrutiny is much more difficult to avoid in the 21st century.
- Make sure procurement activities are translated into hard financial results and that the function can display a clear return on investment, not just in terms of cost cutting.
- Form relationships, not just contracts, with suppliers. This of course is true of any business dealings so is rather obvious. Trust is the foundation for any success in business.
- Similarly procurement needs its own team to be on the same page on what needs to be achieved. In developing its own brand the function must assess how it wants to be seen across the organisation whether it wants to play the role of 'old reliable' or 'innovative and agile'. Both have merit but it will depend on the organisational culture as to which will work best. Better still, show that procurement can be all of those things. Why not even seal the brand with a little logo saying as much on documents.
- Assess how procurement is seen across the organisation as whole and see what needs to be changed. Be prepared for the negative. Changes should come about based on the needs of clients and customers. Here, it's not a bad idea to view other internal teams as customers and listen to their feedback in the same way.
- Communicate the brand across the board, being clear what is expected from the team and what it can deliver to benefit the whole. Use internal technologies, social media to propagate the procurement brand. Keep everyone else informed of the department's achievements and goals. Make some noise.
- Cross the language barrier. Each department within an organisation is speaking a different language, a good number of which are acronyms. Want to talk to people in IT about KPIs and P2Ps? In procurement-speak the latter means 'purchase to pay'. In IT-speak, it means 'peer-to-peer'. If procurement wants to get its message across, leave behind the Excel tables with the math formulas and focus on explaining in plain English the 'whys' of a decision. Whatever department you're talking to, speak to them in their language, not yours. Make sure you're not only heard but understood.
- Don't fall into the 'parent trap'. 'Because I said so' is not the answer to the 'why' questions from other departments when a procurement action is taken that impacts them, in their view negatively. The old Spock quote: 'Because the needs of the many outweigh the needs of the few', also comes to mind as a offering for unpopular decisions but likely would not wash either, though bottom-lining it, that is really what procurement is about. However it would not be the way to build trust unless that already exists in spades. Be transparent. Spell it out. Some decisions may not be popular but often if the reasons are explained well, they are understood.
- Become the go-to department for other teams seeking advice ahead of a procurement action. Be a partner in the process, not just the policers. Take the time to get to know other stakeholders and build relationships with other departments so they know they can trust your judgment so that mutually beneficial solutions can be found. Team members should be more than just number-crunchers. They must be talented and engaged and aligned with overall goals. Soft skills are must in navigating stormy waters.
- Measure progress. This is always a must for success. Branding is always an ongoing and evolving process.
- Mark and celebrate achievements and make them known across the organisation by linking those 'wins' to business outcomes. In other words, take the credit where it is due. Shrinking Violets don't get asked to dance.
Be the change
It might seem unfair that procurement professionals would apparently need to take so many steps and work so hard to change the image of what they do, and to develop a branding strategy just to have their value appreciated across an organisation. But the fact is that this is the reality as numerous studies on the perception of procurement have shown within many organisations. Unless procurement changes itself from within, no one is going to come in from outside and give the function a brand new image.
This recognition is beginning to emerge as a new breed of procurement professionals with a more holistic approach who are not afraid to own their capabilities, start appearing on the scene by 'being' the change they want to see. Today, procurement requires many more skills than the ubiquitous 'bean counting', and those practicing the profession know it. Now they just need to make others realise it too.