Involving procurement as a strategic partner in your business's sourcing process offers significant savings as well as other benefits. It may require some recalibration to your process. Here are 5 tips for encouraging a smooth transition.
More business leaders are recognizing that the right sourcing practices have the power to deliver substantial bottom-line savings. Bottom-line savings drive top-line profits – so there is no reason why businesses shouldn't make the extra effort to optimize both sides of this equation. Where's the best place to start? Sourcing.
Sourcing is often seen as a tactical resource to oversee vendor negotiations, rather than a strategic partner to help make critical decisions along the way. When its strategy expertise is underutilized, however, the whole business pays. For instance, early-stage procurement involvement yields an average of nine percent in sourcing savings – which is a full two percent higher than later-stage involvement, according to the Institute for Supply Management.
It may take some recalibrating to turn strategic procurement involvement into the new norm at your business. Here are a few ways that you can encourage the process and bring your expertise to the forefront of stakeholders' sourcing vision:
1. Do your research
Go the extra mile to build credibility with stakeholders. Show stakeholders that you understand their needs and that you have the resources to meet them. This should be an ongoing process, but you can take the first step by doing your research. Come to the table with spend data and vendor insights that can help drive strategy and meet stakeholders' needs upfront.
2. Show that you're an expert
Not everyone fully understands the extent of sourcing's role in a business, which means they will likely welcome some background on your expertise. Put on your salesperson hat and really showcase the impact that sourcing can make. If you use an esourcing platform, highlight how it simplifies stakeholder involvement and enhances sourcing's effectiveness.
3. Communicate, communicate, communicate
Instead of staying in stealth mode, become a true participant within the business by keeping the lines of communication open with stakeholders. By staying transparent with timelines, deadlines, vendor responses and roadblocks, you can help build up your stakeholder relationships by making sure that they are fully in the loop every step of the way. A strategic sourcing solution is a great way to streamline communication through a single, centralized platform that makes cross-functional collaboration easy.
4. Establish clear responsibilities
Surprises, when they come in the form of unanticipated responsibilities, are never welcome. Mishaps like these are a recipe for tension between stakeholders and procurement, so take every step you can to avoid those unwanted surprises. The best way to do this is by clarifying responsibilities early on and staying connected throughout the sourcing process to make sure tasks are being checked off the list as needed. A strategic sourcing solution can come in handy here, as it provides a streamlined way to assign tasks and deadlines, keeping everyone in sync and on track.
5. Help your relationship live on
Just because the sourcing project is over does not mean it's the end of the procurement-stakeholder relationship you've just built. To help the partnership live on, continue reporting on results – even after the event has ended. This shows stakeholders that you care about the long-term success of a project, and it acts as a friendly reminder of procurement's ongoing value when it comes to strategic sourcing needs, especially if they're communicated in a useful and easy-to-understand way.
Involving procurement as a strategic partner in the sourcing process translates to substantial time and financial savings for stakeholders, but the advantages don't stop there. A research report by Harvard Business Review, in partnership with Scout RFP, points out another benefit: "High-performing sourcing organizations specialize in partnering and collaborating with internal stakeholders to gain a deep understanding of business requirements. At the same time, in their role as an expert consultant positioned between the enterprise and the supply base, they are closely engaged with suppliers and vendors to come up with innovative solutions and fresh ways of approaching business problems."
Getting to the point where procurement's high-level involvement comes naturally within your business is the challenge. If you're looking for a launchpad, use these five tips to turn stakeholders into your advocates.