Short and simple will win the day

James Williams
posted by James Williams
28 March 2017

It’s human nature to look for shortcuts, but remember the vast majority of people want to do what’s best for the business, says James Williams.

One of the challenges facing a centre-led procurement department is that of getting compliance to its procurement strategy and policy.

All the hard work has been done setting up approved panels and supply partners with great commercial terms and operational improvements, but the business is still using suppliers outside of the preferred or mandated ones.

This lack of compliance leads to a number of issues including procurement not delivering the forecasted cost savings, opening up risk within the business where contracts are not in place and increased admin across the business trying to maintain a much larger supplier base than is optimal.

There are, of course, a number of ‘hard’ drivers to get compliance to a centre-led procurement strategy, such as an enforceable policy, top down buy-in and support and control of the P2P systems.

I am sure in some businesses this is enough, but what happens when you do not have these options available or you’re getting a limited success from them? The following may assist you.

For procurement professionals to gain improved compliance to centre-led strategies, they should “make it as easy as possible for people within the business to do the right thing when procuring goods and services”.

By adding and removing friction in the right areas you should aim to ensure that making the right procurement decision is the easiest way for the stakeholders to work.

To do the right thing should have the least friction associated with that process, to do the wrong thing should have the most friction. People will normally follow the path of least resistance, if the right thing to do is also the quickest and easiest then we are on to a win-win result.

In some businesses to do the right thing within their procurement process is normally where the most friction is felt, hence why stakeholders tend to try and bend the rules or ignore the process totally. We’ve all heard the saying “purchase prevention department”.

Stakeholder buy-in is key to centre-led procurement; here are five useful tips to help improve buy-in:

1. Remove friction – Design and set up your processes to make sure doing the right thing (for instance, picking the best value supplier for a job) is the quickest and easiest way for the stakeholder to get the job done. Keep processes short and simple, and attractive to the eye. No long, wordy processes and policies that people will glaze over.

2. Add friction – It should be a lot harder for stakeholders to try and bypass doing the right thing, for instance turn off non-approved suppliers, reduce automation, increase approvals, lengthen process times etc.

3. Utilise social influence – Use quick key facts to spread the word, for instance “98% of the people within this business utilise the approved panel suppliers”. Most people will follow what they believe are social norms.

4. Highlight good behaviour – Let the stakeholder know when they are doing the right thing and thank them, even a quick pop-up at the end of the process or email. Make it personal to them – address it to the individual’s name.

5. Timely prompts – Provided at key stages in the process, these can give gentle nudges to get the stakeholder back on track of doing the right thing such as utilising approved suppliers before setting up new ones.

Improvements to compliance should be seen if the above tips are implemented. Remember the vast majority of people want to do what’s best for the business, but this will sometimes clash with what is the easiest thing for them to do.

We all try and look for shortcuts, it’s human nature and sometimes that will go against what the right thing to do is.

If we make the right thing also the quickest and easiest thing for the stakeholder to do then it will make huge inroads into delivering real benefits to the business, not just by utilising best value suppliers but also reducing the workloads and admin of the stakeholders.

James Williams is a category manager for Australia and New Zealand service provider Spotless. 

CIPS Knowledge
Find out more with CIPS Knowledge:
  • best practice insights
  • guidance
  • tools and templates