Procurement’s Epic Fail – and Golden Opportunity
Have you been part of a procurement transformation project?
How’s it working for you?
The sad truth is that—for many companies—not much has changed. It’s evident wherever sourcing people gather: at any Procurement conference in the last twenty years, there’s likely to be a breakout session with a title like one of these:
- Making Procurement More Strategic
- Getting a Seat at the Management Table
- How to Increase C-Level Visibility
- Procurement Transformation: Building More Buy-in
These are worthy topics, but it’s all a bit pitiful. Because the essence of these conversations is: “We really help the company—we covered ten-times our salaries last year. So why don’t people like us more? We’re important… right?”
Indeed, corporate procurement has roughly the brand sizzle of the punter on an American football team. The punter is something you need to have on your team, not something you really want. No one’s favorite player is the punter. You use the punter because you have to, and you hope he won’t mess up.
Does that sound like how management views procurement? This is the epic fail of procurement and sourcing. It’s tragic, because procurement really is not the punter. In fact, procurement just might be the best athlete on the team; one who could help on every single play.
A Different Definition
Part of the problem is how procurement labels itself. When a player calls himself a punter, the coach isn’t going to ask him to play running back or quarterback. Punter is an activity-based definition. What if a player instead said that he was fast, strong, and had great vision? Those are skills, and they fit in many places on the team.
Too often Procurement allows itself to be defined by an activity: that of “procuring,” or acquiring resources. What if procurement instead defined itself by its skills? Of course, if the skill is simply “Buying” or “Negotiating with Vendors” then the definition might not be much better. But what if it was something a bit more general and widely useful? Such as:
- Making Data-driven Decisions
- Improving Profitability
- Capturing Innovation
- Achieving Strategic Goals
- Ensuring Sustainability
- Promoting Excellence
All of these activities are implicit in good procurement, but they are far more marketable than just helping people buy what they need. Plus, any one of them sounds ten times better than “Procurement” or even “Strategic Sourcing.” The words matter. If we present ourselves with words that limit our value to the act of purchasing or acquiring, then people will naturally believe that is our specialty.
What Procurement People do Best
What is our specialty? Our specialty is making decisions to get the best value out of limited resources. Do you know anyone with limited resources who is trying to get the most value? Of course you do… because that’s called LIFE!
The skills and tools of sourcing are eminently useful. In the next three articles in this series, we’ll take a look at three things that everyone does… and explain why those in procurement and sourcing are positioned and skilled to do them as well as anyone.
- Defining Goals
- Building Options
- Choosing the Best Option
As you practice your craft in the coming days, think of it in terms of these activities. They are not procurement skills; they are life skills.
About the author: Jack Quarles
Jack Quarles is a speaker, consultant, and author of #1 bestsellers How Smart Companies Save Money and Same Side Selling, as well as the upcoming Expensive Sentences. He has saved companies tens of millions of dollars over two decades in the field of expense management, and often advises on RFPs, vendor selection, and outsourcing decisions. Jack is a founder of Xigo and Buying Excellence and serves on the board of Peacemaker Ministries. Jack has received degrees from Yale University and Northwestern’s Kellogg School of Business.
Source: blog.deltabid.com
