Actively Managing Procurement's Image
In September, Procurement Leaders ran an article by Tyler Chamberlain, Coupa’s global head of spend management, on the benefits of getting a solid procurement function established earlier in a company’s growth curve.
As he stated in the article’s title, “If it ain’t broke, don’t wait until it is.” The premise is that making investments in procurement talent and technology before problems arise prevents many problems from ever arising. Supplier records that are managed well from day one never need a massive clean up. Processes that have been in place as long as anyone can remember don’t have to overcome compliance hurdles. Spend that is managed centrally never has the chance to break between direct and indirect.
Perhaps more importantly, and as I had an opportunity to discuss with Chamberlain (click here to hear the conversation on BMP Radio), procurement has control of their internal image from the outset and can build their brand around positive results rather than problem resolution. When we hear Chamberlain’s message from this perspective, all organizations and procurement teams benefit from his recommendations, not just the start-ups.
If dropping the Procurement label helps, do it.
Although it is one of the most recognized organizational labels, being procurement also comes with a lot of baggage in the form of negative stereotypes and preconceived notions. While this is most often seen in the relationships between procurement and other functions, it can also be an issue in recruiting efforts. Bright up-and-coming professionals may bristle at the idea of joining what they see as an administrative, penny-pinching function. It also creates an unnecessary hurdle around selling the value and potential of procurement – when procurement sees sales as the enemy, recommendations to be more sales-y seem unachievable. Instead of working inside of the procurement label, we should focus on actions and taking steps to make our priorities and initiatives more accessible.
Expect technology to be a platform for future growth.
It is true that young companies and their procurement functions need to get technology in place early so that processes and policies can be built on top of it. Any solution put in place must provide immediate return but also has to have the flexibility to fuel the growth of the organization. The same need applies in larger, more mature organizations. In the Procurement Leaders article, Chamberlain defines transformation as “code for ‘something broken that needs to be fixed.’” Requiring such a course correction is a sure sign that technology, policy, processes, or all three did not evolve at the same rate as procurement. Organizations at all points on the growth curve need – and deserve – solutions that enable rather than inhibit progress.
Find the right people for the job.
Chamberlain is the ‘procurement guy’ at Coupa, which in some cases means he’s preaching to the choir. Of course, it also translates into high expectations and a lot riding on his success (no pressure, though). Procurement leaders need to be technical enough to understand system and process relationships. They need to know when to step up and when to get out of the way. But beyond that, what every procurement team needs, at every stage of their growth, is the people with the right skills and vision to take them forward.
Listen to my interview with Tyler Chamberlain on BMP Radio for more insights into what procurement needs to be when – and how – whether your organization is new or mature.