What does procurement actually do?

5 August 2010
In my previous posting on how to win executive support a reader comment highlighted the fact that many procurement professionals still struggle for support and greater recognition, which can – in his terms – damage your “procurement mojo”. So for those readers who still need to convince a sceptical organisation, here are some tips to help market procurement’s benefits to a broad audience across the organisation. How well we sell procurement’s value to the business is key to our success. It is therefore critical we communicate procurement’s intrinsic value to the organisation to gain the influence we desire. Learning to market this value is a critical step in gaining influence. The primary purpose of marketing procurement internally is to raise awareness and understanding of its services, benefits and to facilitate commitment to integrate these services into business processes. Once achieved procurement can start to embed itself into the fabric of the business. To foster stakeholder commitment, we must sell procurement to our stakeholders by clearly and consistently communicating its “value proposition” – the benefits procurement offers to both stakeholders and the wider business. If you were asked to give a 30-second elevator speech to define procurement’s value proposition, what would you say? I have asked this question of fellow procurement professionals many times and frequently find them stumbling over their words. If procurement cannot clearly articulate its value proposition, don’t be surprised when your internal stakeholders don’t get it and brand procurement simply as a service function. CPOs must decide what procurement’s brand image is and then seek to align stakeholder expectations behind the brand’s experience, creating a real perception purchasing is delivering on its promise. Other professions have developed effective brands. Legal is about contractual risk management. Finance own cash management and reporting. Human resources manage human capital. Sales provide revenue generation. Marketing manage brand awareness and development. No one in an organisation would ever seek to claim responsibility for these functions and that they have superior capability to conduct them. This is still not the case in many organisations for procurement. These functions do not have to justify their existence through cost savings. They are simply accepted as a core business competency that has to be done right. CPOs must articulate a value proposition to the organisation beyond cost savings. The goal is for procurement to be perceived as a core “must get right” function in which businesses must excel in order to be successful. Once achieved, procurement’s “mojo” will no longer be in question.
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