Webinar Recap: Practical Ways to Deliver High Performance Procurement
Where is Procurement heading and what trends are driving it in that direction? The report we recently released with Procurious sought to answer those questions. To accomplish that, we interviewed over 300 Procurement professionals from across the globe, asking them a variety of questions about their daily work and their relationships with other teams.
The results were simultaneously shocking, telling, and exactly what we expected. Procurement has come a long way over the past few years, and yet the function has a lot more opportunity ahead. However, reports and findings are just that—findings. For them to become meaningful to Procurement, practitioners need to be able to do something with them.
So we recently sat down with four Procurement veterans to dive into the report and explore our five findings, what they mean, and what Procurement can do to fix them or capitalize on them. Our own Director of Product Marketing Andy Moir was joined by Gilberto Solis, Senior Director, Services Center of Excellence at Thomson Reuters, Tania Seary, Founder of Procurious, and Alun Rafique, CEO and Founder of Market Dojo. Here’s a small sample of their thoughts on Procurement’s biggest opportunities heading into 2024.
Key finding 1: The Struggle to Align
Our study’s first finding revealed that Procurement’s alignment with the business is in decent shape, but it could be better. 49% of Procurement professionals felt that they were aligned with their companies’ strategies while 48% felt that they were somewhat aligned. C-Suite executives, on the other hand, were slightly more optimistic. 56% of them felt that Procurement and company strategy were aligned while 41% felt that the two were somewhat aligned. Why is this the case?
According to Solis, these numbers don’t mean that Procurement is performing poorly. In fact, the function is doing great work, but it still struggles to communicate its results with the wider business, which leads to lower alignment. One of the causes is that reading the business, understanding its pain points, and explaining how Procurement helps is challenging. As Moir explained, different departments often speak very different languages, which almost immediately creates disengagement. Solis’ solution—leave the Procurement acronyms behind and speak the same language as the rest of the business.
Businesses are also in a constant state of transformation, as Seary pointed out. While there are few opportunities more important to Procurement than increasing alignment, teams must change gears to help drive their businesses in the agreed-upon direction. “There’s so much we can do,” she said, “but we can’t always stay in the same mentality. We really have to hook into where the board is taking the company and make sure that our activities are aligned.”
So how can teams do this? As Alun Rafique from Market Dojo explained, the answer lies in two areas. The first is simple: advertise the power of alignment with savings data and show stakeholders what they can achieve when they work with your team. The second lies in feeding governance, compliance, and risk information into board-level strategy decisions. Not only will this data empower better decisions, but it will also help pull everyone together into a cycle of alignment that benefits everyone involved.
Finding #2: There are still key gaps in collaboration
Another key finding from our study with Procurious is that Procurement has a very sobering perspective on its level of collaboration with Finance compared to the rest of the business. While 63% of Procurement practitioners say they regularly work with Finance, 83% of the C-Suite believes it’s a regular occurrence.
Our panelists didn’t find this number surprising, but they each felt that it was a symptom of a more telling problem—the various units that make up a business don’t always know how to work together. There are a few reasons for this reality when it comes to the Procurement-business unit relationship.
First, many companies build procurement functions once the business reaches a certain size instead of building them from the start. In fact, procurement is often one of the newer departments in any given business while Finance and Sales have been there from the beginning. Procurement practitioners find themselves working hard just to insert themselves into existing relationships.
Then, as Rafique explained, Procurement has to appear as or even play cost cutter and initiative blocker, which doesn’t make it an attractive strategic ally. Solis agreed, pointing out that stakeholders don’t always see Procurement as a key success enabler. It’s only once Procurement matures to a certain point that it moves beyond being the “I’m sorry, this is the policy you need to follow,” team to the “How can I help you today?’ team. In reality, Procurement can help each business unit in countless ways, but until the C-Suite steps in to champion or, at times, require collaboration, these business units won’t know what’s possible.
However, as Solis also said, “Collaboration will not happen through policy. At the end of the day, that will only create friction.” Instead, Procurement can only hope to build collaboration by working on projects with stakeholders over time and showing them how valuable the function can be. Seary agreed and took this statement a bit further, concluding that not even technology alone can fix Procurement’s collaboration problems, though many teams try to use it that way. Procurement needs to master the humanity behind collaboration first. Once the function understands how to work with the people behind the stakeholder title, technology, data, and opportunities start to mean something positive to everyone involved.
The study we conducted with Procurious illuminated several of the Procurement trends that we already suspected. However, sitting down with four Procurement veterans to understand the reasons behind these trends and what teams can do to adjust or fix them was equally enlightening.
Of course, what we’ve explored in this blog is only a small snippet of the conversation our four panelists had on the webinar. They went far more in-depth on the two points discussed above before ultimately diving into the report’s other findings.
To explore the rest of what they shared, including a highly practical guide to data discipline from Gilberto Solis, click the image below to watch the webinar for yourself. You’ll gain exclusive insights into what two technology providers, one analyst, and one best-in-class practitioner are seeing and doing to drive Procurement forward in a world of constant change.