Pain Points in Procurement Series
How to Build Procurement Influence and Why it Matters
How to build procurement influence as a way to stay engaged with other business functions, drive value, and achieve more desirable outcomes.
By Hugo Britt | March 16, 2023
Welcome to Una’s Pain Points in Procurement series. Each week, the Una team will explore one of ten common pain points impacting procurement today, and put forth actionable solutions to each of these challenges.
“Hi, is that the procurement team? It’s Joe from logistics. Just calling to let you know we’re selling the current motor pool vehicles and will be switching to a cheaper supplier for our commercial fleet.”
“What? Why wasn’t procurement involved in this conversation? Did you consider…”
“Sorry, the decision has already been made. We just need you to take it from here.”
If you’ve ever experienced a conversation like this, you’ll know the frustration that stems from being left out of a conversation and only being engaged when it is too late for procurement to add any real value.
The problem lies with a lack of influence. If the procurement team in this example had more influence, the logistics manager wouldn’t have dreamed of making this sort of decision without first engaging them. With plenty of warning, the sourcing team could have taken a more holistic view of value, analyzed vehicle demand, dug into historical spend data, examined total cost of ownership, and moved the conversation beyond cost to align with other company goal such as sustainability or social outcomes.
Why do so many companies lack procurement influence?
Achieving better outcomes and getting the best-possible value from procurement activities are not the only benefits that flow from having more influence in the business. Other reasons include risk reduction, creating a cost-conscious culture, and more effective change management when implementing new procurement processes, technologies, and strategic initiatives.
A lack of influence drives up company spend, impacts communication, leads to higher instances of maverick spend and procurement bypass, and damages supplier relationships.
Procurement continues to struggle with influence in organizations for many reasons, including:
- Procurement’s historical role as a non-strategic, back-office function that simply carried out purchase requests.
- Ignorance of what procurement can do and the value it can bring.
- Perceptions of procurement as a bureaucratic or administrative function rather than a strategic partner.
- Confusion about procurement processes, technology, or how to engage with the function.
- Limited resourcing in terms of budget, technology, or personnel.
- Poor alignment with the overall strategic objectives of an organization.
A lack of procurement influence drives up company spend, impacts communication, leads to higher instances of maverick spend and procurement bypass, and damages supplier relationships.
Six ways to increase procurement’s influence
Procurement’s lack of influence appears to be a perennial challenge that can’t be solved without concerted effort. There’s no silver bullet, but here are six ways that can help procurement move a few steps closer to the decision-making table.
1. Align procurement KPIs with enterprise goals
Procurement must align its goals with the overall goals of the organization. By demonstrating how procurement can help the business achieve its objectives, we can increase our influence and gain support from key stakeholders.
Tip: Conduct regular and ongoing “alignment checks” to ensure procurement’s activity remains relevant and focused on the right things.
2. Communicate effectively
Procurement professionals need to communicate effectively with stakeholders, including senior management and heads of other departments. Avoid procurement jargon and use targeted language that will resonate with different stakeholders. By articulating the value that procurement can bring to the organization, we can build support and influence decision-making.
Tip: Don’t be afraid to ask for help! Get in touch with your organization’s internal communications team to ask for their assistance in communicating better with various audiences.
3. Build relationships
Procurement professionals need to develop strong relationships with stakeholders, other departments, and senior management. By building trust and rapport, we can influence decision-making and drive positive change.
Tip: Make the time to understand your stakeholders’ current priorities and challenges, then join the dots to the ways in which procurement can help.
4. Spread the positivity
A glance at procurement threads on LinkedIn and elsewhere will reveal a highly engaged, enthusiastic community of professionals who truly are passionate about procurement. We need to spread this message outside the walls of our profession by celebrating successes and telling stories that will resonate with members of other functions.
Tip: Spreading excitement and positivity about procurement will also help attract more talent to the profession.
5. Chalk up some wins
Procurement isn’t going to get noticed simply by completing its day-to-day tasks. To really grow influence in the organization, the function will need to generate some eye-catching wins.
Tip: Need a quick win in terms of cost savings? Joining a GPO such as Una can help you find savings quickly and efficiently.
6. Emphasize risk management
By highlighting potential risks and developing strategies to mitigate them, procurement can increase its influence and gain support from key stakeholders.
Tip: Una can help you identify the risks associated with your acquisition plans, establish a credible and reliable long-term strategy and help facilitate its implementation.
Learn more about Una membership and how we can help increase procurement’s influence within your own organization:
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