May 05, 2023 | Procurement Strategy
In today's rapidly changing business landscape, procurement leaders face a dual challenge.
One, they must meet their organization's ESG goals and reskill/retain talent, and two, they must identify opportunities and prioritize growth in a landscape that has been extremely unpredictable.
Procurement's role to enable these dual goals has never been more critical.
However, for procurement, the most popular metric by which it is gauged is cost savings. This means that CPOs and procurement leaders can easily get mired in transactional management and operational efficiencies, losing sight of the big picture.
So, how can procurement leaders articulate their goals to match those of the business?
We outline a five-point plan to help procurement leaders achieve success.
Procurement leaders need to identify what they stand for and create a value proposition. They need to ask themselves, “What do we want to achieve? And how can we achieve it?” By defining a value proposition, procurement leaders can articulate their goals and vision in a way that is exciting and resonates with the board. A well-defined value proposition can be instrumental in communicating the value of procurement to the board and gaining their support.
By aligning procurement goals with the board's goals, procurement leaders can demonstrate the value proposition of procurement to the organization and secure investment. Procurement leaders should ensure that they have a clear understanding of the board's goals and how procurement can help achieve them. They can then make a compelling case for procurement's value to the organization.
Procurement leaders need to develop a compelling message that fits the board's strategic aims. This message should be data-driven, highlighting the potential impact of procurement on the organization's sustainability, supply chain transparency and revenue.
Procurement leaders need to support the corporate strategic direction. Procurement's ability to positively impact the organization's sustainability, create supply chain transparency and contribute to revenue is seen as key drivers behind the trend towards procurement's increasing influence and importance.
Procurement leaders need to leverage process automation to free up resources for procurement professionals to concentrate on enterprise priorities. Category managers usually spend nearly one-quarter of their time each week on tendering activities, so enabling staff to step back from activities such as creating POs will free up resources. By developing team skills and talent and leveraging automation, procurement leaders can help their team focus on enterprise priorities and achieve success.
Procurement leaders must brace for this daunting task – juggling priorities such as reskilling/retaining talent, meeting ESG goals and identifying opportunities for growth. It is vital to focus on creating value and gaining a competitive edge, rather than solely prioritizing cost savings and operational efficiencies. With the right approach, procurement leaders can navigate these challenges and emerge victorious, hitting the ground running with a sharper focus on achieving organizational goals.
Learn more about the procurement strategies in the white paper Business Alignment – Securing Investment in Procurement