Beyond Cost-Savings: Proving Procurement’s Worth

Categories : Procurement Goals | Improve Credibility
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Published on : Dec 06 2017

By: IBISWorld Staff Writer, Savannah George

In today’s business environment, it’s critical that every department proves its value. For procurement leaders, this often involves cost avoidance and key performance indicators (KPIs) – all effective measures for communicating to Finance. However, procurement departments offer so much more than this, and yet, these messages often aren’t conveyed to the rest of the business.

To successfully prove your worth to management and across the organization, you need to identify what you bring to the table and learn how to effectively communicate your value. There are so many significant areas that procurement impacts, so it’s important to periodically reevaluate some of these contributions, keeping them on top of mind for use during daily interaction:

  • Technological Innovation:

    By staying abreast of trends, the procurement department can help its organization stay on the cutting edge of technology and incorporate technological best practices, as well as educate employees and help them adopt new technologies. When you successfully onboard a new technology that makes your organization more efficient, increases automation, and/or saves time or money, be sure to communicate this success!

  • Supplier Relationship Management:

    Of course, you work with your vendors to achieve your performance goals. But are you also developing strategic, mutually-beneficial relationships with suppliers that possess capabilities your company does not have yet? If you are, this is something you must make management aware of.

  • Risk Mitigation:

    Everyone knows a key role of procurement is to provide even and uninterrupted delivery of products and services to keep the business running. Today’s business environment is full of risks and procurement must constantly analyze and work to reduce these risks as much as possible. By successfully performing this function, the rest of the organization may not even realize potential fiascos that have been avoided, but this is exactly why you need to tout this valuable role!

Once you’ve refamiliarized with the value you bring to the company, you can take a moment to revel in this awesomeness and walk through the office with a newfound confidence. You do positively impact the business in many facets, so now it’s time to let that message shine through and do a little self-promoting. So how do you communicate this worth to your company and leverage it to build your credibility?

Learn to Tell Your Story

People in general respond better to stories as opposed to numbers and statistics. That’s why marketing departments use case studies, real-world examples and storytelling to communicate a company’s brand. But storytelling isn’t just for marketing departments! Procurement departments would benefit from better communicating their brand, their challenges and successes, and their vision. Procurement should leverage its stories to prove its worth to the business.

How do you do this?

  • Create a page on your corporate website highlighting your mission, your staff members and your success stories and make it easy to find forms, instructions, requirements, contact information, etc.

  • Send company-wide quarterly emails with updates on recently completed projects/successes, upcoming events, featured staff profiles, etc.

Communicate Effectively

Stakeholders expect cost-reduction as part of your role, so you need to communicate the above-and-beyond value that your department is adding to the business. So, your next task is communicating these messages effectively through various channels, including and possibly most importantly with individual, meaningful conversations.

Here are some tips to engage and communicate effectively:

  • Stay in touch with stakeholders regarding projects. They’ll appreciate the ongoing communication and you’ll avoid unwelcome surprises.

  • Make the message unique for each audience. Finance may be perfectly content with a numbers-driven style, whereas marketing and sales may appreciate the story-telling style discussed above. Executives and the Board may require a concise combination of numbers and context.

The key to proving your worth to the organization is understanding your value and being proactive about spreading the message. People only know what you tell them and only understand what’s explained. Seize this opportunity to tailor your own messages and shape your department’s reputation through the company’s eyes. A little shameless self-promotion can go a long way in clearing up common misperceptions and even generate earlier buy-in.


For more information on proving your worth and building credibility, download IBISWorld’s eBook on “Proving Procurement’s Value.”

 



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