Avoid procurement at all costs — this has been the sentiment among sales and marketing teams as they try to show value and secure advocates. However, after some executive tech buyer polling, building relationships with procurement partners may be a good idea.
Catherine Kelly, General Manager, Operational & Commercial Excellence, CP Operations at Shell, discusses how procurement has changed and what benefits it has to your company today.
Procurement’s change in value
For a long time, procurement partner relationships with sales and marketing teams were strained. As the primary function of procurement being viewed as bringing in competitors, lowering prices, and getting competitive bids, a distance was kept as long as possible so a company could demonstrate more value and secure advocates. This sentiment, however, is beginning to change.
Rather than procurement coming in at the end of the pipeline, many executive tech buyers are commenting on how procurement partners are holding a seat at the table with the ability to veto decisions.
Why the empowerment? Procurement partners are gaining credibility and the knowledge base to benefit the business in a way they never could before. Imagine a front desk employee at a hotel who has worked there for 6 months. If they asked for a promotion to a senior-level position, they’d be turned down. Now, 5 years later, that employee has been promoted twice, has a deep understanding of the hotel, and has been taking courses to learn more about hospitality. If that employee wanted to be considered for a senior position now, it would be a different conversation.
”The successful organizations of today really have a procurement function that is able to cover everything from strategic business partnering alongside what is the more traditional contract.” — Catherine Kelly
Procurement has become more than a transactional process and many companies are taking note. A big role for procurement today is removing pain points among discussions and knowing the full scope of a business. Catherine shares some key elements of what makes a good procurement manager:
- Knows the business inside and out
- Understands what problem the business is trying to solve for
- Knows how to go forward with the best suppliers
- Has access to a substantial amount of strategic data
How procurement has become more strategic with technology
Any individual that works in an industry for an extended period of time will continually grow their knowledge base. After a while, having someone that understands the day-to-day of the business and a strong understanding of procurement becomes highly valued by a company.
This is, primarily, why many smaller businesses are bringing in experienced procurement partners — as a way to quickly get on their feet.
”Bringing your procurement people in and having specialists able to operate in that space, I think is why we’re seeing a lot of the smaller companies beginning to see the opportunities that procurement bring.” — Catherine Kelly
The freedom of technology
The COVID-19 pandemic has accelerated digital transformation and how we interact with data. Procurement is no exception. Armed with tools that can help analyze data, procurement can now back up their decisions with data while simplifying their processes that take up much of their time.
“You can lead your people to the right buying channel directly without having to tell them, coerce them, or sit them down and tell them what the right behaviors are,” Catherine explains.
Another area the pandemic has impacted: the supply chain. Go into any grocery store and you’ll see that the supply is less than usual. With the strain, it’s forcing many smaller companies to ask whether they’re missing out on supply chain procurement benefits that could make a big difference in the current market.
Maintaining a long relationship with procurement
We now know that the procurement team is important to a business; but, when is the right time to reach out to them to gain the most benefit? In today’s world, a procurement team is busy solving a multitude of problems — problems that can apply to a range of businesses at any stage of development. Because of this, Catherine suggests always having an eye out for procurement.
”Procurement should be at the table because they understand the business challenges the business is trying to solve, but also from a procurement perspective and their process perspective.” — Catherine Kelly
With their breadth of knowledge, data-driven decision models, and ability to see across an organization, procurement partners are essential to any business. While procurement partners are looking for their own value, they’re looking to add value to the businesses they help at the same time. It pays to always keep the door open and foster those relationships.
This post is based on an episode of the #FlipMyFunnel podcast. Check us out on Apple Podcasts, Spotify, or here.
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