Procurement 2025: We Can Do Better!

A couple of weeks ago, I delivered a keynote focusing on leadership responsibilities during times of transformation. We talked about meta-thesio-phobia (fear of change), how to bring love and care into the workplace (yes, we dared to use the L word, Love), discussed the path of climbing out of the “valley of despair” and why we are in the business of leading others.? It was a very engaging conversation.

But what struck me most, were the questions I received from the audience during and after my presentation. If I could summarize them in one question, it would be “why is it so hard to work with Procurement?”?

It pained me to hear that. I love our field. I spent 25 years in it and plan to continue contributing to it for at least another decade.? But we’re not winning friends as fast or as much as we’d like. Allow me to share with you my thoughts on why we, as a function, haven’t progressed to the degree we had wished.?

We’re over-indexing on RFPs. We tend to create multi-page documents that are difficult to compile, even more difficult to reply to and then it is daunting to read all responses in their full entirety.? Not all RFPs are created equal, and some certainly serve an intended purpose, but those are few and far between. We tend to issue RFPs for low value/low risk engagements, and then spend valuable time, of all parties involved, going through the countless pages. What if instead, we become clear and succinct about the scope, share with participating suppliers what we’re looking to solve, and then listen to the solutions designed for our specific needs vs. reviewing cookie-cutter responses that fit into the RFP format? ?Wouldn’t it be a win for all? Let’s declare war on RFP-ing everything!

We’re underestimating the power of Category Management. One of the ways to reduce RFP volume is to double-down on the subject matter expertise that Category Managers bring to the table. Deep knowledge of a particular category of spend is instrumental in ensuring speed to market. If a category manager proactively explores current market tendencies, continuously analyzes supply base composition, stays on top of industry best practices in a respective category of spend, then they often will have a pretty clear idea of what the cost of goods and/or services should be. Their expertise and accumulated knowledge will allow them, in partnership with their stakeholders, structure a solution that would generate an intended value within a condensed timeframe.

We’re not building the right connections with our suppliers.? Squeezing suppliers on margins is so yesterday.? You know what’s in fashion today?? Knowing suppliers’ businesses just as well as they know it. How often do we ask suppliers what costs them money?? Do we understand the effectiveness of their operations? I’m not suggesting we should guide them on how to run their companies, but if we understand their strengths, we can create a better match between our needs and their services. Besides, our suppliers are the main source of market intel and industry best practices because they serve a lot of different companies. While we all consider ourselves unique, in truth we are not. Shouldn’t we learn and benefit from the innovative solutions of others?

?We are focusing on operational/transactional work.? Clunky processes, huge volumes of low significance transactions and lack of automation eat up our time and energy.? The solution is complex but can be summarized as Analyze—Eliminate—Templatize--Automate—Outsource.? In this exact order.? Outsourcing transactional workload first doesn’t make sense – you’ll still be paying for it – but elimination of what doesn’t serve the organization anymore will free up a lot of time and resources that can step into much needed Category Management work. Investing in building a strong rapport with budget owners and key stakeholders will generate joint projects, and increasing spend under management, will allow you to generate real value for the company.?

Procurement people, we can do better! Let’s simplify how we do business, elevate our people, and become the most beloved and fun business partners that everyone wants to work with. I believe in us!?

If you’d like to discuss how to get there, DM me. It’ll be my pleasure and honor to assist you in elevating your procurement organization.