Procurement’s Expanded Role

In the 10 years I’ve been involved with CoreTrust, I’ve noticed a big change in the view of procurement’s role in our member organizations.

 

At one time, other organizations would tell procurement what they wanted and procurement was then assigned to negotiate for it. Now, procurement is much more involved in decisions well in advance of the negotiation process, which enhances the value they bring perception-wise across the organization. Along with this has come the need for procurement leaders to become adept at building relationships across departments and become salespeople as well, which can be a difficult task for those used to being sold to.

 

For instance, IT departments historically would entertain suppliers and make their own determination of who they wanted to use and then have procurement proceed to negotiate, many times with the supplier knowing they had the business. The same can be said for HR benefits, logistics, travel, etc. And this is only in the indirect space, where leverage should be at its strongest. Obviously, this is not optimal.

 

Today, we’re seeing relationships being built where procurement has a seat at the table of any supplier meeting and can use their expertise to help all communicate the appropriate message to obtain the best result for the organization. Also, with the improvement of procurement tools, such as GPO’s, the value shown to these stakeholders is more apparent. After all, they are responsible for their budget.

 

Reaching out to other departments and putting yourself on the other side of the “sales table” is an important aspect of a successful procurement organization. A key factor for success is getting the C-suite to understand the value this can bring and be an agent that helps bridge this historical gap. Get to know your stakeholders and get involved early on in the process so that you can maximize your effectiveness. You’ll not only help drive cost out of your organization, but you’ll feel like a truly integral part of the team.

Scott Miller

Scott Miller

CoreTrust VP of Sales