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MyPurchasingCenter

Can Purchasing Bootstrap and Lead the Transformation of an Organization?

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Procurement’s role in an organization touches across many departments, suppliers, countries, and competitors. This situation requires that procurement professionals possess excellent communication skills and the ability to quickly adapt to different cultures, perspectives and crises. 

 

Author: Dr. Tom DePaoli, Author & CEO at Apollo Solutions

Editor’s note: This article is part of the MyPurchasingCenter content archive. It was originally published in 2015 and has been revised for length and to reflect changes in terminology use – most specifically, the functional label ‘purchasing’ has been replaced with the word procurement.

Transforming your own organization’s culture is a grueling challenge. Expecting procurement to “bootstrap” or use its own resources rather than external help, in organizational transformation, is a demanding goal. Procurement, however, has many of the qualities and capabilities to act as the prime catalyst for this quest.

Many procurement organizations have radically changed or reengineered themselves from traditional clerical type organizations. The supply management or supply chain concept is rapidly becoming the norm. This type of change was monumental and transformative.

Could procurement pull the bootstrap off? Most would say this is highly unlikely, but below are some tactics that could lay the groundwork or accelerate a successful transformation of an organization. Many have been previously used to transform purchasing into supply management.

Breaking down department silos by involving diverse cross-functional teams in sourcing decisions

Including internal and external customers in as many decisions as possible is a sound empowerment tactic that pays off dramatically. Teamwork in such efforts deepens the understanding of participating employees in the overall procurement cycle and helps imbed the concept of total cost of ownership.

Incorporating grassroots efforts to ask internal customers how procurement can help simplify purchasing transactions

People usually appreciate colleagues who try to make their jobs easier and are not afraid of criticism. Making all transactions pain free, fast and intuitive is a strong way to increase value of and improve respect for procurement. Acquiring strong base business knowledge for procurement by working side-by-side with production and sales, both improves product knowledge and enhances procurement professionals’ credibility and business perspective. This helps expand the understanding of the voice of the paying customer.

Marketing the importance of procurement and the supply chain with visible metrics

This creates a clear focus that others appreciate. Procurement has to aggressively market its importance to the organization and develop a formal internal marketing plan of its goals.

Crafting a long-range procurement plan that aligns with the organization’s vision, mission and strategic plan

This step helps to justify procurement’s efforts to the rest of the organization. Communicating with colleagues on a one-on-one basis should be especially encouraged. This gives procurement professionals a chance to make their pitch to as many folks as possible and develop strong relationships.

Conducting cross functional training

Inviting people from other departments to participate helps sell procurement’s goals and metrics. Vital feedback can be obtained on the usefulness of procurement systems and procedures in such sessions. 

Developing leadership skills and practicing leadership in groups.

This final, but most important step, is a good long-term skill-building course of action for all of procurement. Most experts agree that one skilled leader can turn an organization around. Procurement needs to be ready with leadership skills to help lead or encourage the organizational transformation process.

Any department would face and probably fail at the nearly impossible task of bootstrapping the transformation of an organization. Procurement, however, would be the best place to start the transformation quest and develop the passionate and powerful leaders required to execute it.

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Wednesday, 05 August 2020

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