In this guest post, an extract from a column that appears in the May/Jun issue of Procurement Leaders Magazine, Deutsche Telekom's Eva Wimmers shares her view on what qualities procurement should aim to emphasise in the transformation process.
Procurement is the one business function that has had to change the most over the past 15 years. That transformation from an internal service into a high-performing, fully effective business function is now in full swing.
This change has meant that procurement now not only acts on instructions from business departments but in many cases is defining category and vendor strategy, getting involved at the ‘design phase' and leading discussions with the business on not just what will be bought, but how it will be procured. These are big changes and to cope under such circumstances the prerequisite from an organisational point of view is to be integrated in all decisions involving expenditure and investments from the design phase, in order to maximise its influence on costs.
To do this procurement needs to be:
â€¨Not involving procurement at the design phase should be considered a ‘procurement bypass', according to the mindset of the company.
At Deutsche Telekom, procurement is involved in all of these areas and is also heavily involved in the decisions the business makes around what we buy. We call that ‘mandate' demand-shaping.
But procurement on its own is a toothless tiger; so we favour a ‘twinship' model where procurement acts in tandem with the respective business department.
That dialogue begins right from the design phase and lasts throughout the life cycle of the product. Together we determine the direction, speed, and which gear the journey takes. We also exchange ideas on how to lower costs through specification changes, standardisation or through changing vendors or using different vendor solutions. In this process, the roles can fluctuate flexibly in terms of who speaks about price and who speaks about the product or service, but the dialogue remains close and both parties work on achieving the common target.
To be in that playground, buyers need to prove at least three of the following qualities:
These skills require the ability to listen and not just talk. Many buyers tend to spend most of their time talking instead of asking questions or understanding the circumstances and the challenges that are in the way of stakeholders or then figuring out how these can be overcome.
They often do not research the motivations and incentives of their counterparts. At Deutsche Telekom the teams are trained in that ability with special workshops and team exercises.
The modern procurement team today needs to be quite diverse with edges and strong personalities, but with excellent communication and collaboration skills. We would not employ someone who was an excellent negotiator but didn't have these personality traits because while you can develop negotiation skills you can't change a personality and ultimately all business is people business in procurement.
Eva Wimmers is SVP group procurement, Deutsche Telekom. She is on Procurement Leaders advisory board.
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This contributed article has been written by a guest writer at the invitation of Procurement Leaders. Procurement Leaders received no payment directly connected with the publishing of this content.