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Highlighting the Value of the Procurement Department

KellyBarner

Owner and Editor of Buyers Meeting Point

Professional procurement teams have struggled for years to demonstrate the total value of the function. Most people in an organization automatically associate procurement with savings, and while this continues to be a very high priority, savings does not begin to capture the full impact procurement can have on operating efficiency and competitive advantage. To that point, the high level of pressure placed on executive teams today almost guarantees that if procurement was not seen as a value-added function by leadership, we would have been automated or completely outsourced by now.

Although that inferred assurance may make us feel better, it does little to address the fact that we are continually put in the position of having to convince others that our suggestions and recommendations are not driven by savings alone, but that they incorporate both the total cost of ownership and the long term opportunities associated with each category and supplier.

It probably comes as no surprise that communication will play a key role in transforming how procurement is perceived internally. But a successful procurement re-brand will require more than a memo, a story in an internal newsletter, or a presentation at a company meeting. The updated messaging – and the style it is communicated through – must connect with target audiences at a company-wide, functional and individual level.

Company-Wide

I recommend starting the re-positioning effort at a company-wide level. This ensures that the executive team is on board with the need to reposition the procurement department’s brand — which is not always a guarantee — and with the messaging that supports it. Whenever possible, tie procurement’s value proposition to major corporate initiatives. This will not only increase the rate at which the ‘all new procurement’ is embraced by the rest of the company, it will reinforce the messaging by providing a reason for the changes – making clear that they are driven by procurement’s capabilities and the organization’s needs rather than just procurement’s ambition. If procurement wants to be recognized as a team of trusted consultants within the company, it must be evident to others that the executive team trusts procurement’s opinion about how they are positioned internally.

Functional

When you start to drill down into the unique types of value procurement can offer to each part of the organization, opportunities to adjust the messaging on a more detailed level emerge. In order to communicate effectively, procurement first needs to understand the perspective and priorities of each internal team: Are they tactical or strategic? Are they incentivized by cost efficiency or supplier relationship management? What kinds of performance metrics are they measured by? How closely (and eagerly) have they worked with procurement in the past? The answers to these questions will indicate whether we need to tweak the message or directly address a more substantial change in strategic direction. If this message is delivered effectively to finance, marketing, operations, et al procurement will see their efforts turn into results in the form of healthy relationships with other departments.

Individual

Communicating procurement’s message quickly requires a broad, top-down approach, but this will have a limited effect unless procurement can also carry out the communication plan on an individual level. This requires a number of elements: a well-crafted message designed to connect with the person being addressed, a keen understanding of the questions that will arise, and a personal delivery style that aligns with the new messages. Put simply, if procurement wants to overcome a lowest-cost image, even a carefully crafted message needs to be delivered personably. Credibility will be built with in-house stakeholders one at a time based on individual, meaningful conversations.

The majority of my focus in this article has been on how procurement can reposition itself in the organization through purposeful messaging and interactions. We must choose our words carefully, deliver them in a way that connects with each audience, and reinforce the message with an appropriate demeanor. As true as this advice all is, there are two final, important recommendations that require procurement to collaborate with and rely upon those around them:

  1. Remember that communication is not just about speaking – procurement needs to listen as well. A finely tuned outreach message should not presume to ‘know it all’. We must still be open to input and feedback – even when it is not all positive. This requires just as much planning as the original message. What will procurement say in the face of criticism or suggestions? What expectations should be set about the actions to be taken as a result? There is as much to be lost as there is to be gained during important one-on-one conversations with key stakeholders.
  2. Keep in mind that procurement may not always be the best source of updated communication about its own functions. We can talk about ourselves and our goals endlessly, but in some cases it’s better to let others sing our praises. Look at your organization and identify the most trusted or respected people – at all levels and in all functions. Make sure they are involved in the re-branding effort and the reasons behind it and leverage their influence whenever possible to increase the reach of procurement’s direct, value-oriented efforts.

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About the Author
Kelly Barner is the owner of Buyers Meeting Point, an online resource for procurement and purchasing professionals. Her unique perspective on supply management is based on her time as a practitioner, a consultant at a solution provider, and now as an independent thought leader. Kelly has led projects involving members of procurement, supplier, and purchasing teams and has practical skills in strategic sourcing program design and management, opportunity assessment, knowledge management, and custom taxonomy design. She earned her MBA from Babson College, a Master of Science in Library and Information Science from Simmons College, and a Bachelor of Arts in English and History from Clark University. Kelly has been awarded a Provider ‘Pro to Know’ award by Supply & Demand Chain Executive magazine every year from 2012-2016, and in 2013 she was recognized as one of 28 “Top Female Supply Chain Executives.” Kelly has co-authored two books, “Supply Market Intelligence for Procurement Professionals” in 2014 and “Procurement at a Crossroads” in 2016.

For a printable pdf of Highlighting the Value of the Procurement Department , click here.

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