Why Procurement Isn’t Seen As Strategic By Your Board

Posted 25/01/2016

A recent Spend Matters blog was entitled The Winds of Change: Procurement Gets Its Seat at the Top Table .

It’s certainly a challenge many in procurement face – how to raise the credibility of procurement within organisations so that we’ve got a seat at the table, are involved in strategic decisions and can truly deliver the value procurement has the potential to deliver.

If only others within the organisation would listen!

We’ve all said it many times, and in many many different ways - the answer lies in: identifying the stakeholder’s motivations and problems, helping them solve their problems, selling the benefits, measuring the benefits delivered, influencing and communication and so on.

Yesterday I realised the crux of any good coaching session is helping the client realise they can’t change anybody else only themselves. That is the solution lies in changing their beliefs and their actions.

Which leads me to ask - what is procurement doing, believing or saying that’s contributing to the reaction we’re getting from others in the organisation?

I realise that Kraljic may just have the answer with his 4 segments of:

         1. Routine – Processes and effective working
         2. Bottleneck – Risk mitigation
         3. Leverage – Negotiation and cost out
         4. Strategic – partnering and relationships

Where would you place procurement as a category in these              4 segments?

From the majority of procurement’s daily actions I’d suggest it’s likely either routine, bottleneck or leverage.

No surprise then that the organisation treats us as such, and forgets to see us as partners and keeps us away from the top table.

For leaders to listen we need to start taking procurement seriously, and by word and action demonstrate that procurement category deserves the strategic label? Once we start doing that then the top table, and other business stakeholders, may start taking us seriously. Until then don’t be surprised when they keep telling you how they want efficient ordering processes and more price reductions!

What's your experience? Let us know in the comments below or via @FPurchasing.


Tagged by topic: Category Management , Procurement Transformation

  by Alison Smith

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