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In this guest post, Procurement Leaders welcomes a call to action from Bill Young of Kestrel Ops - Procurement needs to get the attention of the business and it needs to think differently in order to do it, he argues.
For all procurement's ambitions, internal clients still often regard everything before the contract as their domain. Early engagement is still an uphill battle: time-consuming and energy-sapping, with a high risk of no reward. Procurement isn't invited to the party, it's still waiting by the phone.
What is the obvious thing to do, then? Gatecrash it: stop waiting by the phone, go find the action. Better still, make the action! The service function concept was fine, in theory. Set up as a business partner; engage early; create benefits beyond savings...but it isn't working out that way.
Yes, there are good war-stories about contributions that go beyond the call of duty, but that is the problem: the basic duty has not changed. Everyone sees the procurement role as negotiating lower prices for goods and services that are already defined; they still measure you on price reduction.
How can we get their attention? Gate-crashing sounds too radical for girls and boys who are famous for nothing, if not their caution.
So, before you go there, give the 'two steps backwards' technique a try? Every time you get involved in a new procurement project, try to move it two steps backwards. You read that right – two steps backwards. It works like this. Your role is to reduce the price from a selected supplier: one step back is supplier selection; two steps back is supply market research. It depends on how you define the steps, and whether there are five, six or seven in your procurement process, but the principle is the same: move the procurement project two steps backwards. Your aim is not to be obstructionist, but to convince the internal client that this is the right thing to do; or that it would have been, had there been time; and that there will be - the next time.
As a best practice technique, 'two steps backwards' not only works in practice, but passes the harsh test of reductio ad absurdum. No matter how far you go, it continues to work. There is no point when it is too early or too basic for considering the external supply market. And that leads to the gate-crash. Why wait for the phone to ring when you can make the action right now?
Is everything in your organisation so good that only the responsible departments are capable of seeing improvement potential? Of course, not! That is so absurd it feels foolish to state it as a question. Maybe you doubt that Procurement is qualified or entitled to challenge the status quo. If not you, who? Every procurement person reading this could write down at least three areas that would be improved by a cold, hard look at what your competitors and suppliers are already doing together.
The question is not whether you can find areas to improve, but how to select and propose them.
Here's what should you not do: do not mutter with colleagues along the corridors; do not launch a project independently; do not go to the CEO.
What you should do has two parts. First, answer the following questions:
These are simple – but not easy – questions. The answer to each has to fit closely with live and pressing priorities.
Let's take an example. Your headquarters has a lot of temporary staff, interims, contractors and consultants who appear to work in ongoing roles, very much like employees. In fact, external staff account for 35% of all those with a security badge and permission to do work. Is this a problem worth working on? Let's find out by answering the what's-in-it-for-me questions?
When you have answered these, go to part two – and to the responsible manager. In this case-study, there is a doubt over who that is. But you were warned: this is simple – but not easy.
Have you got what it takes? Or will you be sitting in again tonight?
Bill Young is the founder of Kestrel Ops and specialises in development of sales and procurement capability.